Bringing positive signals
Ms. Giang Do, Consulting Director at Savills Vietnam, believes that the 2024 Land Law will bring about groundbreaking changes, promoting efficiency, transparency and a more flexible approach to land valuation. By adjusting prices to the market and expanding local decision-making power, the new law helps improve the land valuation process, bringing benefits to both the market and the state budget. This will increase the supply of real estate, help reduce the imbalance between supply and demand, and lower housing and land prices.
In the future, when the land price database is completed, information on buying and selling will also be made public. At that time, buyers and sellers can access to find out transaction information, helping market participants have a clear understanding, increasing transparency for the real estate market. In addition, buying and selling real estate will also take place more easily, helping to increase liquidity for the market.
"The laws related to real estate that have been passed and are expected to take effect soon, along with a series of transport infrastructure projects that continue to be invested in and put into operation, major projects about to enter the market, and the confidence of buyers returning, will bring positive signals to the real estate market this year," said Ms. Giang Do.
A series of laws related to real estate coming into effect soon are expected to help the market recover soon.
Sharing the same view, Dr. Tran Viet Anh, Vice Principal in charge of Hung Vuong University, commented that the new Land Law, Housing Law and Real Estate Business Law will have a positive impact on the market, businesses, people and the state. In particular, the Land Law helps businesses access land funds more easily to develop projects. The Real Estate Business Law clearly stipulates that the deposit for purchasing future housing must not exceed 5% of the contract value, reducing the amount of prepayment when leasing future housing (not exceeding 50%); individuals doing small-scale real estate business do not have to establish a company; real estate brokerage businesses only need one person with a brokerage certificate...
The law also contributes to purifying the market through regulations: Real estate brokers must participate in real estate trading floors, cannot practice freely, and commissions must be transferred via bank. Investors must publicly disclose information about real estate projects before putting them into business. When trading products, the actual transaction price must be recorded in the contract. At the same time, it is necessary to tighten the subdivision and sale of land (up to type 3 urban areas)...
In addition, the Housing Law will help increase people's access to housing; add more subjects, creating favorable conditions for overseas Vietnamese and foreigners to buy real estate in Vietnam. The Law also provides many regulations to develop the social housing segment by adding more subjects to buy and rent this type of housing. At the same time, stricter regulations in the field of housing management and development such as regulations that mini apartments must have a complete fire prevention and fighting system, must establish a project... These moves help purify and make the market transparent, protect investors from being scammed, and help the market develop sustainably.
"In reality, there are signs that the market has all the elements to take off, such as support from the upper echelons, laws related to the market taking effect soon, the determination of investors, and the confidence of customers/investors has been strengthened. All of these factors interact to help the market recover more quickly," said Dr. Tran Viet Anh.
The market will recover by the end of 2024
Looking back at the development history of the real estate market, Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association, commented: In the period of 2017 - 2023, 4 years from 2020 - 2023 were the most difficult period of the market. The cause comes from the Covid-19 pandemic and geopolitical conflicts in some regions. These conflicts increase the risk of inflation, reduce aggregate demand, disrupt the global supply chain, thereby directly affecting the domestic economy and real estate market.
"In the first quarter of 2023, the real estate market was negative 16.2%, negative 11.5% in the second quarter of 2023 and negative 8.7% in the third quarter of 2023. By the end of 2023, real estate growth was negative 6.38%. By the first quarter of 2024, the number of new housing projects was too small, and there was still a shortage of social housing projects. From now until the end of the year, the market in Ho Chi Minh City is still at risk of an imbalance in housing supply and demand. In particular, the phase difference leads to a severe shortage in the affordable commercial housing and social housing segments," Mr. Chau cited.
In that context, to help the market recover and develop soon, the Government has proposed that the National Assembly allow the Land, Housing and Real Estate Business laws to take effect early from July 1, 2024.
According to Mr. Le Hoang Chau, when the laws related to the real estate market come into effect soon, it is necessary to quickly issue relevant decrees, circulars and instructions. From there, the legal system ensures consistency, unity and closeness to reality, which will handle most of the legal problems of 148 real estate projects in Ho Chi Minh City and hundreds of other projects across the country. Because legal problems account for 70% of the current difficulties of businesses. "If the laws come into effect soon, they will have a positive impact, promoting the recovery and redevelopment process of the real estate market from around the end of 2024 and return to normal around mid-2025 onwards, due to the delay in policies and procedures for investment and implementation of real estate projects," Mr. Chau predicted.
In fact, the market has been gradually recovering in recent months, but there is differentiation between segments and regions. In which, the apartment segment, especially projects targeting real demand, has recovered the fastest. Hanoi is the locality that has recovered quickly in both price and number of transactions. Ho Chi Minh City is slower but also has positive signals.
From now until the end of the year, supply will continue to change in a strong upward trend. Housing demand will actually remain high when economic growth remains at double digits, the urbanization process, especially in large cities such as Hanoi, Ho Chi Minh City, Da Nang, Hai Phong, Binh Duong, Dong Nai ... is taking place strongly. Real estate trading floors and brokers have also returned to more activities. People with housing and investment needs are no longer waiting for the market to decrease prices further but have started to "hunt" for real estate. It is expected that with new laws taking effect in the next few months, the real estate market will soon return to the "new normal" state and quickly recover.
Mr. Le Hoang Chau, Chairman of Ho Chi Minh City Real Estate Association
The opportunity is still very large.
Statistics show that from 1990 to now, the world gold price has increased about 30 times, the US and world real estate prices have increased about 100 times. In Vietnam from 1990 to now, the real estate price in remote areas has increased about 100 times, in big cities like Hanoi and Ho Chi Minh City it has increased about 400 times. This is a very terrible increase. The price has increased due to limited supply. In addition, the accumulation of assets in Vietnam is among the highest in the world. This means that there are still great investment opportunities.
Economist Le Xuan Nghia
Source: https://thanhnien.vn/bat-dong-san-se-am-len-khi-cac-luat-co-hieu-luc-som-185240526215554209.htm
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