Real estate market flourishes, Vietnam becomes a bright spot

Vietnam is an attractive destination for real estate M&A activities.

PV: Recently, a series of policies have been "permeating" causing the real estate market to gradually improve. How do you evaluate the real estate picture in 2024?

Dr. Nguyen Minh Phong: Overall, although the real estate market still faces many difficulties and the recovery is uneven across segments, in my opinion, the real estate market has overcome the most difficult period.

The real estate market in 2024 will record positive movements in terms of total supply, total demand, input and output; both macro and micro, short-term and medium-term in policy as well as management and business practices...

Real Estate - Real estate market flourishes, Vietnam becomes a bright spot attracting foreign investment — Economist, Dr. Nguyen Minh Phong.

In the coming time, the penetration and effectiveness of policy removal and improvement of the legal environment will be evident, with a series of new law projects such as the Housing Law (amended), the Real Estate Business Law (amended), and the Real Estate Law (amended) containing many new points.

The results of removing difficulties and obstacles in projects are increasing. In 2023, Hanoi removed 58.8% of the number of projects with difficulties and obstacles; Ho Chi Minh City removed 37.2%. The projects that have been and are being removed and untied will contribute to ensuring supply and promoting the market in the coming time.

The bottlenecks in approving projects in new residential areas will be resolved and the supply in the market is increasing. The social housing market will have many brighter improvements thanks to the strong increase in supply from large projects nationwide by both the State and private sectors.

The industrial real estate segment will be more vibrant thanks to the implementation of infrastructure projects across the country and increased activities of the FDI sector. The high-end commercial housing segment will recover more slowly because real demand has not been able to surge. The real estate market is and will continue to be supplemented with new momentum from the results of implementing public investment capital and attracting FDI. In general, the real estate market will be more vibrant and transactions will increase from the end of 2024.

All of the above mentioned factors have a positive impact, increasing confidence and strength in the real estate market and spreading to more than 40 other industries in the national economy.

PV: Many people believe that the real estate market has great potential. In your opinion, will Vietnam become a bright spot attracting foreign investors in 2024?

Dr. Nguyen Minh Phong: The new wave of tourism recovery, with hotel performance measures in Hanoi and Ho Chi Minh City returning to pre-Covid-19 levels. That shows that the restructuring move will be stronger and opportunities are only for businesses with safe and sustainable development strategies, focusing on segments that meet real needs and have sufficient financial strength. At the same time, gradually eliminate incompetent units that do business in a "quick-fix" manner.

In 2024-2026, it is predicted that there will be an explosion of foreign capital into the Vietnamese real estate market, especially from Asian countries such as Korea, Singapore, Malaysia, Thailand, as well as from Middle Eastern investors. In my opinion, the investment goals still lie in finding clean land funds (with legal ownership, complete compensation and clearance), with good quality, real value and development potential.

Real estate projects with the potential to expand, in line with domestic and regional demand trends regarding changes in global supply chains, will continue to attract the attention of both domestic and foreign investors. Vietnam remains an attractive destination for real estate M&A activities, as Vietnamese legal regulations allow the sale of unfinished real estate projects (while this is not possible in other countries - PV).

The potential for industrial, residential and hotel real estate is huge. M&A activities in industrial real estate will have the opportunity to increase associated with the opportunity to benefit from many free trade agreements (FTAs), as well as the extensive facilities and supporting industries, extensive experience and knowledge of the Vietnamese market that domestic enterprises bring to the cooperation relationship with foreign partners.

The high-end office market with green certification maintains high occupancy rates and stable rental growth rates, adding to its appeal in the real estate M&A market.

In general, although there are always attractive opportunities, the real estate M&A market in particular and real estate business in general are not business fields for all investors. I believe that success only comes to businesses that have the ability to evaluate and analyze the market and have solid financial potential.

Speed up the process of removing administrative procedures

PV: Although the real estate market has many opportunities to break through in 2024, it still faces difficulties and challenges. In your opinion, what is the solution to help the real estate market develop healthily and sustainably?

Dr. Nguyen Minh Phong: In the coming time, more efforts are needed from relevant parties, especially from businesses, to regain consumer confidence, improve the imbalance between segments and clear cash flows from sources, including the bond market and prepaid capital from customers.

Real estate - The real estate market is flourishing, Vietnam becomes a bright spot attracting foreign investment (Figure 2). — The real estate market is starting to pick up (Illustration photo).

To resolve difficulties for the market, the State Bank needs to strictly implement the Prime Minister's direction at the meeting on December 7, 2023 on resolving difficulties in credit capital for businesses. Accordingly, it is necessary to pay attention to: Sharply reducing lending interest rates; Continuing debt restructuring; Improving conditions for new loans; Increasing management and eliminating bad debts due to speculation and fraud; Continuing fiscal policies related to capital, taxes, fees, public investment to support monetary policy...

In particular, localities need to speed up the establishment and approval of plans, as a basis for implementing real estate projects; publicize the list of real estate projects that must select investors through bidding so that businesses can fully grasp information, proactively research, and register to participate in a public and transparent manner...

Continue to speed up the process of removing obstacles in administrative procedures related to real estate projects; strengthen inspection and examination to avoid causing difficulties and inconveniences in handling administrative procedures for businesses and people. Increase the authority of provincial People's Committees to issue policies and mechanisms for social housing development in accordance with local realities.

Real estate businesses need to restructure product segments and prices; improve project quality and strengthen investor confidence. At the same time, businesses need to promote capital mobilization through issuing corporate bonds on the stock market.

PV: Thank you for the interview!

N.Giang

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