Vietnam's real estate market in the first quarter had the lowest transaction volume in the past four years due to the impact of the Covid-19 pandemic, said Vietnam Association of Real Estate Brokers (VARS).

VARS vice-president Nguyen Van Dinh told VietnamPlus that the reasons for that situation included a strong reduction in new supply last year, a long Tet (Lunar New Year) holiday and the novel coronavirus pandemic.

“The number of transactions only accounted for about 10 per cent of total offered property products in the first quarter, too low compared to the same period of last year,” Dinh said.

However, the price of apartments and low-rise houses in the quarter did not decrease against the fourth quarter of last year. Now, there are no businesses announcing discounts for those products, he said.

In the first quarter, property enterprises nationwide offered a total of 53,200 units in housing projects, while the successful housing transactions reached more than 7,600 units, VARS said in a quarterly real estate market report last week. The absorption rate of this housing segment was 14.3 per cent.

Of this, the total new supply was nearly 18,700 housing units, including more than 8,350 apartments and more than 10,300 low-rise houses. The successful transactions for the new supply reached more than 2,750 housing units.

Meanwhile, the inventory was more than 34,550 products, including 4,872 products traded successfully.

The luxury apartment segment had the largest inventory, said VARS.

The Hanoi Department of Construction said about 8,900 apartments were offered in the Hanoi market in the first quarter, including 1,167 newly-launched products. The market had only 1,300 successful apartment transactions.

The Ho Chi Minh City Department of Construction said more than 8,400 apartments were offered on the city market in the first quarter, including 4,664 newly-launched products. The market had 1,400 successful apartment transactions.

VARS reported that transactions were mainly landed property in other localities’ property markets. Before the Lunar New Year festival, these products still attracted many customers and small investors but now, due to the pandemic, the transactions of those products was very quiet.

Besides that, the pandemic made large investors and trading floors suspend trading activities of their products because customers do not want to come to crowded places. About 50 per cent of total real estate trading floors must close and many property brokers are unemployed.

For the resort segment, the market had few newly-launched products while some products of the inventory were traded successfully in the first quarter.

VARS reported that in this quarter, there was a virtual land fever in Hanoi’s Thach That district and in Ba Ria-Vung Tau province.

In the second quarter of this year, Dinh said, the domestic property market would remain stagnant like in the first quarter, especially the resort segment.

The Hanoi and Ho Chi Minh City markets are expected to have traded apartments in the second quarter but the volume would be low and mainly in the affordable and mid-grade segments due to high demand, he said.

Those two large markets are predicted to have not many newly-launched apartments so property products that are traded on the markets would mainly be inventory goods.

VARS also forecasts that the land and landed property will remain the dominant product in many provinces and cities, excluding Hanoi and Ho Chi Minh City. However, transactions are likely to decline sharply over the same period of last year.

Prices of affordable and mid-end apartments in urban areas are expected to not increase because of low demand during the pandemic and high inventory, said VARS.

Meanwhile, price of high-end apartments may fall because capital pressure would force investors to reduce the price.

VIET NAM NEWS/ASIA NEWS NETWORK