Vietnam house prices expected to fall as credit rates soar

Rising credit rates and the broader cost of living crisis will push city house prices down sharply in the coming months after prices dipped 0.1% in December. Property experts have predicted that average house prices in Vietnam could fall by at least 10% next year.

Predicted 2023, House prices in Vietnam might decline sharply

With a lack of bright and optimistic colors, real estate prices will resume falling. Experts also anticipated that in 2023, real estate prices might go down even further. The prospect of interest rates persisting in climbing sharply amid the cost of living squeeze, plus the impact in recent weeks of higher mortgage borrowing costs on affordability, are likely to exert more significant downward pressure on house prices in the months ahead.

Vietnam house prices are predicted to decreasin

The tightening of credit and the way liquidity has been "frozen" in Vietnam's property market negatively influenced real estate developers and companies. It could lead to a recession in 2023. Currently, there have appeared real estate businesses offer discounts of up to 40-50% off product prices. At recent seminars on the real estate market, local economist Dinh The Hien had warned about a prolonged decrease in land and housing prices, with ordinary decline rates ranging from 10% to 20%.

Vietnam property prices witness the decline

Individual investors lowered provides prices of land and houses in Ho Chi Minh city by some 30% in October, while businesses offered discounts of 40-50% to boost stagnant sales. Currently, an individual investor named Long sold an apartment at a big project in the city's Thu Duc City for VND1.8 billion ($72,600), down over VND500 million compared to the original price he paid nearly two years ago.

Another investor thoroughly dealt with a 600-square-meter plot of land in HCMC's Can Gio District in October after cutting its offering price to VND18 billion from VND21 billion. Last month, the investor of an apartment block project in Thu Duc City's Truong Tho Ward reported a list price of around VND65 million per square meter. Still, a discount of 43% would be involved if buyers make immediate payments. A property company in HCMC, which is developing a project in the neighboring province of Dong Nai, has sold several shop houses over the past two weeks after offering discounts of up to 50%, its salespersons said, adding that the houses were sold for VND6-8 billion per unit.

Nguyen Tuan Anh: A salesman of Tan Long Land Real Estate Agent, said the challenges are due to credit tightening, bond bottleneck, and losing liquidity over the past few months, which caused the "starving" capital of the property market.