(CLO) Some long-standing "shelved" real estate projects are showing signs of being restarted and introduced to the market. This result is thanks to the active support from State management agencies and the Prime Minister's Special Working Group in efforts to resolve and remove legal difficulties and obstacles for businesses and projects.
Many "zombie" real estate projects revive
Since 2018, credit policies and decisions of agencies and departments in controlling the real estate market, especially legal issues, have caused a series of projects to be delayed for a long time.
However, recently, after a difficult period, along with the recovery of the Vietnamese real estate market, a number of "zombie" and "abandoned" projects have been restarted and re-implemented. Especially apartment projects in big cities such as Hanoi and Ho Chi Minh City in the context of apartment prices continuously setting new high levels.
Some "zombie" and "abandoned" real estate projects have been restarted and re-implemented. (Photo: PO)
According to the Vietnam Association of Realtors (VARs), the "revival" of these projects is not only an opportunity for investors to have resources to continue maintaining production and business activities, but also contributes to solving the "thirst" for housing for people.
According to VARs, with the drastic direction of the Prime Minister, the timely and effective participation of the Prime Minister's Working Group, from the end of 2022 to now, a number of real estate projects have had their legal and policy bottlenecks removed for re-implementation.
Projects with information about re-implementation in recent times include Astral City project (Thuan An city, Binh Duong), HaNoi Melody Residences project (Linh Dam, Hanoi), QMS Top Tower project (To Huu, Hanoi), The Summit Building (Tran Duy Hung, Hanoi), Ecity Tan Duc urban area (Duc Hoa, Long An),...
New regulations have a deterrent effect
VARs believe that the restart of previously stalled projects has been, is, and will continue to be promoted thanks to support from the Government and the private sector through project mergers and acquisitions (M&A).
In particular, according to the new regulations, if investors let their projects "sit still" for 48 months, they will face the risk of "losing everything" and having their land reclaimed without compensation. This will also make investors more aware and urgent in their efforts to "restart the project".
In fact, recently, the Government has made many policy adjustments and provided support to encourage businesses to continue implementing stalled real estate projects, including tax reductions and loosening of lending regulations.
According to the new regulations, if investors let their projects remain "inactive" for 48 months, they will face the risk of "losing everything". (Photo: TCX)
Most recently, the legal environment has been improved through three important laws: the Land Law, the Housing Law and the Real Estate Business Law, which officially took effect 5 months earlier with many regulations amended and supplemented to remove difficulties and obstacles for real estate projects.
Plans to develop previously abandoned real estate projects will also be promoted as the "thirst" for housing is constantly increasing along with economic development and urbanization.
In particular, VARs believe that thanks to the participation of new investors, especially foreign investors, through mergers and acquisitions (M&A), on the basis of the new and improved legal corridor, a more transparent and convenient business environment has been created.
"Restoring stalled real estate projects is considered a key factor, helping real estate businesses continue production and business activities. However, to be able to successfully "restart" projects is not a simple matter. Because it comes with many difficulties and challenges," VARs stated.
Even when legal issues have been resolved, financial pressure is still extremely difficult for businesses. This is also one of the reasons why some "revival" projects are not successful.
Accordingly, projects that are abandoned for a long time often face infrastructure degradation, causing huge recovery costs. Along with financial costs incurred during the suspension period, "eroding" all profits according to the original implementation plan.
This has led many investors to “revive” the project and then open it for sale with a new asking price that is up to double the previous opening price to make a profit. The high price while the quality is not upgraded, makes the project not accepted by the market and quickly “silences”.
Source: https://www.congluan.vn/nhieu-du-an-bat-dong-san-xac-song-hoi-sinh-se-giai-toa-con-khat-nha-o-post317696.html
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