According to a report by the Ministry of Construction, the real estate market in Q3 2023 showed more positive signs compared to the previous two quarters. Specifically, there were 29,723 successful transactions for condominiums and private houses, and 91,277 successful transactions for land plots.

Based on the aggregated data, land plot transactions increased by 135.72% compared to Q2 2023. Meanwhile, the number of transactions for condominiums and private houses remained unchanged from the previous quarter.

However, real estate inventory remains high, totaling approximately 16,940 unsold units, including:

• 3,196 condominiums,

• 6,554 private houses, and

• 7,190 land plots.

Real Estate Inventory Concentrated in High-Value Segments
Illustrative image. Source: Báo Tin Tức

According to the Ministry of Construction, condominiums have been the least affected by the market’s negative impacts over the past year, mainly because their supply caters to real housing demand. In addition, interest in condominiums has begun to recover, with purchase demand increasing by 1% and rental demand rising by 6% compared to the previous quarter.

Meanwhile, for land lots and standalone houses, although investor interest and search volume have improved slightly compared to previous quarters, overall transaction activity remains weak. The selling prices of townhouses, detached homes, and land plots in many localities have stabilized and stopped declining sharply, but they have yet to show signs of recovery. In outlying areas, property transactions remain sluggish, with stronger price declines compared to major urban centers.

Despite positive signals such as more favorable policies and declining interest rates, many real estate projects are still on hold due to legal obstacles, planning adjustments, site clearance issues, and rising construction material costs. Additionally, developers continue to face challenges in accessing credit and corporate bond funding.

As a result, inventory levels have continued to rise. The bulk of unsold inventory is concentrated in high-end housing, including luxury condominiums, detached homes, land lots, and resort-style apartments. The total value of unsold inventory is estimated to be in the tens of trillions of VND.

A recent report by the Private Sector Development Research Board (Board IV), based on a preliminary analysis of the financial statements of 1,579 listed companies across 10 industries, shows a revenue decline across all sectors — with real estate and construction being the hardest hit.

As of the end of Q2/2023, property transactions had yet to recover. Real estate and construction companies faced the most severe cash flow challenges, as evidenced by a significant increase in average collection periods (the time taken to collect receivables after sales) and inventory turnover days.

Specifically, in Q1/2023, the average inventory turnover period for real estate companies reached 5,662 days. Some companies even recorded up to 54,334 days — meaning at current sales rates, it could take 149 years to clear their inventory.

Legal Bottlenecks Hamper Real Estate Market Recovery

Experts note that market liquidity remains low, and prolonged legal bottlenecks have caused a buildup of unsold inventory. This situation reflects the broader challenges facing the property sector today.

Most of the inventory stems from large-scale projects facing difficulties in sales — not due to developers’ own shortcomings, but primarily due to external factors such as unresolved legal issues, limited credit access, and an overall market downturn.

Widespread legal entanglements, overlapping laws, restricted access to credit, and tight bond markets have placed considerable pressure on real estate companies since early 2022.

Mr. Phạm Lâm, CEO of DKRA Group, stated that due to weak market liquidity, many developers have become more cautious in launching new products. A number of them are currently focused on restructuring their operations after being impacted by economic instability and bond repayment pressures, especially toward the year-end — further straining the market.

Real estate inventory is primarily associated with projects that are stalled due to legal issues, paused construction, or inability to release products to market. These contribute to increasing financial burdens, especially rising interest costs.

Regarding this issue, Mr. Lê Hoàng Châu, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), emphasized that what real estate developers need most now is policy reform — particularly in terms of credit access and legal procedures.

He highlighted the urgent need to amend the Investment Law and Land Law to unlock resources for project implementation, address market supply-demand imbalances, and reduce the growing volume of unsold inventory. In particular, authorities must expedite the resolution of pending projects that are mid-construction or in the compensation stage, enabling developers to restore cash flow and avoid financial stagnation. These are among the key contributors to the current inventory crisis in the real estate sector.