More action to remove obstacles in real estate market

VIR's editor-in-chief Le Trong Minh opened the roundtable on April 19

Speaking at the opening of the roundtable, VIR's editor-in-chief Le Trong Minh stated that the real estate market is an important component of the economy, but it is also facing major challenges – especially cash flow difficulties and legal bottlenecks that reduce customers’ confidence.

He said that the fluctuations in the global economy and some internal difficulties have slowed down the nations recovery. GDP in the first quarter of 2023 only reached 3.32 per cent - the second-lowest level during the 2011-2023 period.

In particular, the stagnation of the real estate market recently has created legal problems, accounting for 70 per cent of the difficulties, according to information from the Ministry of Construction.

“In Hanoi and Ho Chi Minh City alone, it is estimated that about 400 projects have encountered hurdles during their implementation phase. These bottlenecks have lasted for many years but have not been resolved,” Minh said.

The roundtable discussion saw the participation of leading economists, real estate experts, and business representatives, who pointed out the key problems, solutions, and international best practices from across the region.

Legal problems, supply and demand, prices, and capital sources for the real estate market were all key issues at the roundtable

According to Can Van Luc, a member of the National Financial and Monetary Policy Advisory, three main problems are hindering the development of the real estate market currently, including legal issues, supply and demand, and prices.

Proposing some solutions for sustainable market development, Luc recommended that management agencies should observe that Vietnam still has a lot of room to develop credit for housing, real estate in industrial zones, and segments which are in short supply.

"Guidelines for the establishment of specialised real estate financial institutions such as housing savings funds, social housing development funds, real estate investment trusts, and refinancing agencies should be set up and smoothly operated to facilitate capital flows to the market," Luc added.

Meanwhile, it is necessary for real estate businesses to develop a specific and feasible plan for paying off mature corporate bonds (especially for the 2023-2024 period), while also diversifying their income sources to ensure capital flows.

According to Dr. Le Xuan Nghia, another member of the National Financial and Monetary Policy Advisory Council, there is a shortage of real estate in Vietnam, yet both the short- and long-term demand is high. Over the past 5 years, the licensing and implementation of projects has decreased sharply. Especially in the last two years, there have been almost no new projects launched, leading to an increasingly scarce supply of residential real estate.

“If the legal process is good, projects are available, and the prices are reasonable, the demand will be huge. Although the market may leverage a new price level, it will continue to increase at a stable and healthy pace. Any business or investor who can stand this price level will survive. Failing that, they will have to restructure their portfolios to suit the market,” Nghia said.

The list of speakers include:

Vo Hong Thang, research and development director at DKRA Vietnam

Phan Duc Hieu, member of the National Assembly’s Economic Committee

Vuong Duy Dung, deputy director of the Housing and Real Estate Market Management Department, Ministry of Construction.

Nguyen Van Dinh, chairman of the Vietnam Real Estate Brokers Association

Nguyen Quoc Hiep, chairman of GP Invest and the Vietnam Contractors Association

Gibran Bukhari, sales director at Masterise Homes

Nguyen Hai Thao, lawyer at Mayer Brown LLP

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Removing bottlenecks in real estate market Capital flow, legal bottlenecks, and removing policy obstacles in real estate are the main issues to be discussed by policymakers and experts in a roundtable themed held by Vietnam Investment Review on April 19.