Factors to revive the real estate market
According to Journalists & Public Opinion , information from Vietnam Report, Capital - Land Fund - Policy are the 3 pillars affecting the recovery of the real estate market. In which, the ability to access adequate capital allows businesses to finance construction projects, thereby directly affecting the competitiveness and development of businesses in the market.
Additionally, capital facilitates innovation and technological advancement in the industry, allowing companies to adopt modern construction techniques and sustainable practices, which can improve efficiency and appeal to environmentally conscious consumers. However, as real estate is perceived as a high-risk sector, access to capital for real estate businesses is not easy.
To cope with cash flow shortages, borrowing from commercial banks is still the top choice with 52.8% of businesses choosing it. The option of issuing bonds saw a sharp decline in February 2023, now showing signs of warming up. In addition, solutions to reduce operating costs such as: optimizing operations, streamlining human resources, and salary structure for employees also tend to increase.
The second factor is land fund, the basis for real estate projects to be formed, planned and developed. Currently, one of the bottlenecks that businesses are facing is the regulation that projects must have residential land, this is a difficult condition to implement and limits the formation of large-scale projects.
Capital - Land fund - Policy are the 3 pillars affecting the recovery of the real estate market in 2024. Illustration photo from the internet
Accordingly, the National Assembly has allowed the Government to develop a Project to submit to the National Assembly for promulgation of a Resolution on piloting the implementation of commercial housing projects through agreements on receiving land use rights or having land use rights for other land, which will allow investors to "negotiate on receiving land use rights for residential land and other land or other land that is not residential land", or will remove obstacles for cases where investors "have land use rights other than residential land" to soon implement the project.
Finally, policies and legal frameworks shape the real estate market. While in the past the real estate industry was entangled in a matrix of overlapping laws, recent policy reform efforts are considered a strong impetus to revive the market after a period of stagnation.
Accordingly, the revised Land Law passed by the National Assembly on January 18, 2024 has removed the "land price framework" and stipulated the "land price list" in Article 159. This provision is assessed to speed up the process of land recovery and site clearance when compensation value is calculated based on market mechanisms; land transfer transactions are taxed based on the new "land price list" which will bring in greater revenue to the budget.
In addition, a number of other Laws have also been amended, such as the amended Law on Real Estate Business (passed on November 28, 2023), the amended Law on Housing (passed on November 27, 2023), and the amended Law on Credit Institutions (passed on January 18, 2024), which have initially had a positive impact on the psychology of the subjects, creating momentum for the real estate market to recover soon.
When the revised laws officially come into effect, it is predicted that the real estate market will develop in a safer, healthier and more sustainable direction. In particular, the regulations towards removing difficulties for investors and buyers of social housing in the new laws, when officially effective, will attract businesses to participate in development, promoting the supply of social housing.
Differentiation between market segments
According to Marketing World, information from Vietnam Report, the real estate market in 2024 will have more positive signals than in 2023, but there will be differentiation between market segments.
Specifically, segments serving industrial development needs, real housing needs, and suitable for people's financial conditions will recover first; housing segments, luxury apartments, and resort real estate will recover more slowly.
In particular, residential real estate, low-cost and mid-range apartments are the segments where demand exceeds supply in the market. Policies to remove obstacles and promote the market will be the conditions to increase supply and bring the market back to life.
For the office leasing and industrial real estate segment, many favorable factors from geographical location, public investment in infrastructure, strong FDI capital flow into Vietnam... will also help this segment become attractive again.
In particular, the industrial park real estate segment leads the recovery trend with 34.5% of businesses assessing that there are many positive signs in the first half of 2024.
In particular, residential real estate, luxury apartments and resort real estate are assessed as less optimistic. The reason is that the supply is in excess after a period of hot growth, people are not too interested in investing in these segments.
The real estate market is still in a state of shortage of affordable housing products, which is one of the reasons why the market is difficult to develop sustainably. Therefore, experts say it is necessary to look at actual conditions and diversify products, not just focus on developing high-end housing.
Dao Vu (T/h)
Source
Comment (0)