3 big problems of the real estate market
On the afternoon of August 3, Prime Minister Pham Minh Chinh chaired an online conference to evaluate the implementation results of Resolution No. 33/NQ-CP dated March 11 of the Government and propose solutions to remove difficulties and obstacles for the real estate market.
 |
| Mr. Le Tu Minh, Chairman of IMG Investment Joint Stock Company, spoke at the conference. (Source: VGP) |
Speaking at the conference, Mr. Le Tu Minh, Chairman of IMG Investment Joint Stock Company, said that the essence of removing difficulties for the real estate market that the Government is interested in lies in 3 issues.
The first is to combat land speculation.
According to him, land speculation and real estate market manipulation are currently affecting the Vietnamese economy. People buy land waiting for the opportunity for prices to increase, causing a part of the productive forces to "sleep" and not be effective, which is a huge waste.
The experience of other countries is to use taxes to regulate speculation. He gave the example of a company that currently has a project in Australia, which has to pay 2% land tax every year. The land price is independently assessed by the tax authority each year.
Each year, this unit has to pay land tax of 700,000-800,000 USD when the project has not been implemented. This year, the local government decided to increase this tax rate to 4%.
"If Vietnam implements this policy, only those who actually do projects will dare to hold land, and when holding land, they must carry out projects very quickly. This measure not only prevents land speculation but also helps the Ministry of Finance have a large source of revenue," Mr. Minh shared.
Business representatives proposed that the Drafting Committee of the Land Law supplement and apply a 2% annual land tax rate and apply progressive tax when land plots are not put into business or do not generate profit, as is being done in foreign countries.
The second is the State Bank's interest rate management policy. He believes that it is time to reduce medium-term interest rates to below 10%/year, specifically around 8.5%/year plus or minus like 2 years ago, because with medium-term interest rates above 10%, no economy is healthy.
This interest rate in other countries is 3-5%/year. In Vietnam, the interest rate 5-6 months ago was about 12-14%/year. Businesses do not want to borrow, do not dare to borrow and customers lose confidence in the real estate market, they put their money into other areas.
He also proposed that measures should be taken to prevent or limit real estate businesses from participating in banking and vice versa. Because businesses participating in both of these fields mobilize social capital mainly for their own businesses and have little effect on society, even creating tycoons who monopolize the economy.
Third is to remove legal obstacles and administrative handling.
The biggest difficulty for real estate businesses today is legal issues, not banking issues. There is legal overlap, the same issue, the same regulation but many interpretations, the enforcement level does not implement and does not dare to do, mainly at the local level.
Therefore, he recommended quickly completing the legal system so that officials can work with peace of mind. There should be a clear decree on the decentralization of power and responsibility of all levels, clearly stipulating: content to be completed, time of completion, and responsibility if the deadline is exceeded.
The company's leaders also proposed that the Ministry of Planning and Investment allow Vietnamese enterprises to apply Article 44.3 of the Investment Law and Article 126 of the Land Law, extend the land lease term or allow enterprises to pay land rent for 70 years so that industrial parks have sufficient term length and are attractive enough to land lessees. This is both in accordance with the law and increases local revenue.
Villas and land plots are both discounted
The Ministry of Construction’s recently released real estate market report shows that in the second quarter, there were nearly 100,000 successful transactions. Of which, the second quarter’s transactions were mainly focused on the land segment with 67,525 successful transactions, equal to about 99.9% compared to the first quarter, and equal to about 31.5% compared to the same period last year.
The remaining nearly 30,000 transactions were successful for apartments and individual houses, accounting for 75.61% compared to the previous quarter, equal to about 43.03% compared to the same period last year.
However, in the second quarter, the real estate segment of individual houses and land in projects that investors are interested in is mainly speculative in nature. Buyers are no longer interested in the above real estate segments as before.
In addition, many investors are facing cash flow problems, using too much financial leverage and the developer has stopped supporting loan interest rates. The market has a sharp decrease in liquidity, leading to many transactions with a loss-cutting nature becoming stronger.
The selling price of villas and project land in many localities in the quarter continued to decrease by about 2-5% compared to the previous quarter. In addition, these properties may continue to be adjusted to appropriate values, commensurate with the investment value of the product and the regional infrastructure in the coming time.
Some areas have seen a significant decrease in transaction prices, especially in suburban districts and outlying areas in the quarter such as: Ha Dong district, Me Linh district, Hoai Duc (Hanoi); District 12, Binh Chanh district, Nha Be district (HCMC); Ngu Hanh Son district (Da Nang); Bien Hoa city, Nhon Trach district (Dong Nai).
Vinh Phuc: Calling for investment in 6 social housing projects
Based on practical needs in the area, the People's Committee of Vinh Phuc province is calling for investors to build 6 social housing projects with a scale of about 8,000 apartments and townhouses for workers.
Vinh Phuc is a province with a developed industry, in the area there are many industrial parks attracting a large concentration of workers, so the need for housing to settle down for many workers' families in particular and low-income people in general is an urgent problem.
It is known that from 2014 to present, the People's Council and People's Committee of Vinh Phuc province have issued many mechanisms, policies, and regulations on housing management and development for social subjects. In particular, Decision No. 159 of the Provincial People's Council on supporting social housing projects for workers and low-income people in the province in the period of 2015-2020; Decision No. 14 of the Provincial People's Committee on priority criteria for selecting subjects eligible to rent and buy social housing in the province; Decision No. 179 on the implementation plan of the Housing Development Program of Vinh Phuc province to 2020, with a vision to 2030; Decision No. 1247 on promulgating the 5-year housing development plan, period 2021 - 2025...
In addition to directing departments, branches and localities to strengthen management and attract investment in housing development projects, Vinh Phuc province also prioritizes allocating capital for housing development. In 2023 alone, the capital for housing development in the province is VND 8,606 billion. Of which, capital for commercial housing construction is VND 2,748 billion; capital for social housing construction is VND 164 billion and capital for households and individuals to build themselves is VND 5,694 billion.
Mr. Nguyen Thanh Ha - Deputy Director of the Department of Construction of Vinh Phuc province said that in Vinh Phuc province, there are currently 5 social housing projects being implemented, including: Vinaconex Xuan Mai low-income housing area; Housing area for workers and low-income people in Khai Quang ward; High-rise social housing area for workers in Goc Nu area, Khai Quang ward (Vinh Yen city); 8T low-income housing area, Xuan Hoa ward, Phuc Yen city; Social housing area in Phuc Thang ward (Phuc Yen city).
“The above social housing projects have invested in and completed 1,623 houses with an area of 50 - 70m2/house, meeting the housing needs of workers and low-income people from 2015 to present. Currently, Vinh Phuc Provincial People's Committee continues to call for investment in 6 social housing projects with a scale of about 8,000 houses and townhouses for workers. The procedures for project implementation are being carried out according to regulations,” said Mr. Nguyen Thanh Ha.
According to the Prime Minister's project "Investing in the construction of at least 1 million social housing apartments for low-income people and industrial park workers in the period of 2021-2030", Vinh Phuc province's target is to complete 28,300 social housing units, of which 8,800 units must be completed in the period of 2022-2025, and 19,500 units must be completed in the period of 2026-2030. This is a big goal, requiring great efforts and determination from relevant departments and branches to complete.
Thanh Hoa: List of social housing projects behind schedule
According to information from the Thanh Hoa Department of Construction, currently in the province there are 18 social housing projects that have been invested and are under construction, of which 12 projects are on schedule, have put into use part or all of the project, and 6 projects are behind schedule.
 |
| Social housing project in Bao Ngoai street. (Source: BXD) |
It is known that the reason for the slow progress is determined by the functional agencies of Thanh Hoa province due to the slow site clearance of the project, the slow implementation of investment and construction by the investor for the assigned land area, and the unscientific management of investment and construction for the projects... Among the slow-progressing social housing projects in Thanh Hoa, first of all, we must mention the AMC I Social Housing Project in Quang Thanh Ward, Thanh Hoa City, which has been "shelved" for many years.
On September 24, 2014, Thanh Hoa Provincial People's Committee issued Document No. 8870 approving investment in the social housing development project of AMC I Social Housing Area in Quang Thanh Ward, Thanh Hoa City.
Accordingly, the People's Committee of Thanh Hoa province approved the investor, AMC Global Development Joint Stock Company, to invest in the AMC I Social Housing Project. The investment and construction objective is to create conditions for low-income people in the area to have stable housing, meeting the needs of about 900 households with a total investment of nearly 527 billion VND, used from self-owned capital and other legally mobilized capital sources.
The project was extended by the Thanh Hoa Provincial People's Committee for implementation time and progress within 36 months. Of which, the investment preparation phase is 6 months from the date of project investment approval, the investment implementation phase is 30 months from August 6, 2020 to February 6, 2023. After officially starting construction on January 21, 2021, up to now, AMC I Social Housing Area only has a few unfinished construction items, inside the project campus, weeds grow wildly.
Next, is the Bao Ngoai social housing project, Dong Huong ward, Thanh Hoa city with a series of violations, causing the project to remain "blocked" until now. Thanh Hoa Provincial People's Committee issued Document No. 3071 approving the investment policy of this project in 2018. Construction - Trading Joint Stock Company 379 (located in Hanoi) is the investor.
At the end of 2022, although the competent authorities had not yet accepted and permitted the apartments to be put into use, many households that bought apartments in apartment building 379 moved in and lived freely.
On January 9, 2023, the People's Committee of Thanh Hoa province decided to administratively fine 80 million VND against Construction - Housing Development Joint Stock Company 379 for putting the project into use and operation without a document approving the results of fire prevention and fighting acceptance.
After organizing an inspection of the project's completion acceptance, the Ministry of Construction recently sent a document to the People's Committee of Thanh Hoa province, stating that the above project did not meet the conditions for approval of the completion acceptance results according to regulations.
In addition to the above two social housing projects, four other social housing projects in Thanh Hoa also suffered the same fate, including: Social housing in Quang Thanh ward, Thanh Hoa city, invested by Hop Luc Infrastructure Development and Construction Investment Company Limited; housing for workers in Hoang Long Industrial and Urban Park, Tao Xuyen ward, Thanh Hoa city, invested by Vietnam Housing Real Estate Investment and Development Joint Stock Company; social housing development for workers in the eastern area of Le Mon Industrial Park, Thanh Hoa city, invested by Sunjade Vietnam Shoes Company Limited; social housing in Quang Thang ward, Thanh Hoa city, invested by An Phu Construction, Tourism and Trade Company Limited.
Source
![[Photo] 2nd Conference of the Party Executive Committee of Central Party Agencies](https://vstatic.vietnam.vn/vietnam/resource/IMAGE/2025/3/31/8f85b88962b34701ac511682b09b1e0d)
![[Photo] Prime Minister Pham Minh Chinh receives delegation of leaders of US universities](https://vstatic.vietnam.vn/vietnam/resource/IMAGE/2025/3/31/8be7f6be90624512b385fd1690124eaa)
![[Photo] Ministry of Defense sees off relief forces to the airport to Myanmar for mission](https://vstatic.vietnam.vn/vietnam/resource/IMAGE/2025/3/30/245629fab9d644fd909ecd67f1749123)
![[REVIEW OCOP] An Lanh Huong Vet Yen Cat](https://vstatic.vietnam.vn/vietnam/resource/IMAGE/2025/3/27/c25032328e9a47be9991d5be7c0cad8c)
Comment (0)