5 recommendations to increase FDI capital in real estate
Speaking at the workshop, Mr. Nguyen Anh Tuan, Deputy Director of the Foreign Investment Agency, Ministry of Planning and Investment, said that good policies are needed to continue attracting FDI capital into real estate. In recent years, attracting many FDI projects in the real estate sector has helped diversify real estate types in Vietnam: industrial real estate, high-end housing and apartments, resort real estate, healthcare real estate... have increased significantly alongside traditional types such as residential real estate.
Mr. Nguyen Anh Tuan said that it is necessary to attract more FDI capital to support the recovery of the real estate market.
Mr. Tuan said that to date, the country has attracted more than 37,500 projects with a total investment capital of nearly 450 billion USD, of which 1,100 projects in the real estate sector have a total investment capital of 66.4 billion USD, accounting for 15% of the total investment capital. Real estate is the second sector in attracting investment, after the processing and manufacturing industry.
There have been 48 countries/territories investing in the real estate business sector, led by Singapore, followed by Korea, British Virgin Islands and Japan.
Locally, 45 provinces/cities have invested FDI in the real estate sector. Of which, Ho Chi Minh City leads the country with a total registered investment capital of over 16 billion USD, accounting for 24.7% of the total investment capital, followed by Hanoi, Binh Duong and Ba Ria - Vung Tau.
In terms of project scale, most FDI enterprises participating in the real estate sector in Vietnam are large-scale enterprises, with increasingly diverse forms and higher quality.
To attract more foreign capital into the domestic real estate market, Mr. Tuan said that, firstly, it is necessary to continue reviewing and perfecting legal regulations on the real estate market, especially new types of real estate (smart cities, resort real estate, real estate combined with healthcare, condotel, officetel...) in accordance with international practices.
Second, proactively attract selective investment, targeting investors with good financial capacity, with solutions associated with a green and sustainable economic transformation model; at the same time, promote investors' responsibility towards the environment and society during the investment process in Vietnam.
Many domestic and foreign experts attended and gave their opinions at the workshop.
Third, urgently and flexibly manage and synchronize monetary policy tools to meet the demand for credit capital flows to serve the development of the real estate market. Create conditions for businesses, home buyers and investors to quickly access credit capital.
Fourth, continue to improve and enhance the quality of infrastructure in general and transport infrastructure in particular to create a foundation for the development of the real estate market.
Fifth, continue to improve the attractive, competitive, and transparent investment and business environment, promptly remove policy difficulties and obstacles to create the most favorable conditions for investors, especially for large land-using projects that are slow to deploy.
Speed up law amendments to support real estate recovery
Deputy Minister of Construction Nguyen Tuong Van affirmed that real estate is an important sector in economic development in many countries and Vietnam. On average, the contribution of the construction and real estate sector to GDP in recent years accounts for about 11% of total budget revenue (of which the real estate sector directly accounts for about 4.5%).
Deputy Minister of Construction Nguyen Tuong Van expressed his commitment to accompany domestic and international businesses and investors in promoting sustainable development of the real estate market in Vietnam.
However, in recent years, the real estate market has faced many difficulties and challenges, and many issues have arisen that need to be resolved. The Ministry of Construction has chaired the drafting of the revised Housing Law and the revised Real Estate Business Law. The two draft laws were submitted to the National Assembly for comments at the 5th Session of the 15th National Assembly in May and are being finalized for expected approval at the 6th Session of the 15th National Assembly in November 2023.
Mr. Van assessed that the amendment and completion of these two laws will have a positive impact on the housing and real estate markets, significantly improving confidence in the investment environment, creating transparency and stability. This is especially necessary for the recovery and sustainable development of the Vietnamese real estate market. The Ministry of Construction is committed to accompanying domestic and international businesses and investors in promoting the sustainable development of the real estate market in Vietnam.
Need to focus on social housing and industrial real estate
Mr. Nguyen Van Khoi, Chairman of the Vietnam Real Estate Association (VNREA), said that the real estate market is sluggish in many segments, with a slight increase in the social housing and industrial real estate segments. If we focus on resolving the above-mentioned difficulties and problems and reducing interest rates, the real estate market will show clearer signs of recovery in early 2024, with many real estate products coming to market.
Mr. Nguyen Van Khoi, Chairman of VNREA, suggested that interest rates should be reduced and bond capital should be released to help real estate overcome difficulties.
According to Mr. Khoi, the interest rate for commercial housing loans is suitable for income, recommended below 7%/year; social housing: for businesses, recommended below 6%/year; for home buyers below 4.5%/year; tourism and resort real estate, recommended below 9%/year; luxury residential real estate, recommended from 9 - 10%/year.
In addition, Mr. Khoi suggested that there should be an effective mechanism to unblock capital flows in the corporate bond market; create conditions to support businesses and guide businesses to offer and trade corporate bonds in accordance with legal regulations; extend debt repayment for businesses with debts due; shorten investment procedures, especially for social housing projects and renovation of old apartments...
Regarding long-term solutions, it is necessary to soon issue amendments to the Land Law, Housing Law, and Real Estate Business Law in a synchronous manner to avoid overlap; policies and mechanisms that are attractive enough for investors, developers, and real estate buyers...
For businesses, it is necessary to restructure products, prioritizing segments that meet the needs of the majority of people; re-manage businesses, redefine costs to lower reasonable selling prices in the market; negotiate with investors on debt deferral plans, barter, etc.
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