Vietnam's real estate market is at the bottom of a "U-shaped" shape.

On the morning of March 15, the Vietnam Real Estate Association directed the organization of the annual event "The 4th Spring Real Estate Forum and the Ceremony to Honor the Leading Real Estate Brands in 2023 - 2024".

The real estate up cycle will be very slow.

Speaking at the opening of the forum, journalist Pham Nguyen Toan - Vice President of the Vietnam Real Estate Association (VNRea) assessed that in 2023, the real estate market has gradually warmed up when the Government and ministries, branches and localities recognized bottlenecks and are accelerating institutional reforms, simplifying administrative procedures, overcoming overlapping and inappropriate legal regulations, causing risks to implementers.

Citing the latest survey by the Vietnam Real Estate Research Institute (VIRES), Mr. Toan said that at present, many National Assembly deputies, experts who are members of the Government's advisory council, leaders of ministries, branches, businesses and international investors... all believe that investor confidence in the Vietnamese real estate market is gradually returning, positive energy and bright spots are present.

“However, to restore and develop the real estate market, financial resources are very important. And what is even more important is the institution. Good institutions will unlock resources and help "money make money". The legal "clothing" is expanded, the room for development will open up,” the Vice President of VNRea emphasized.

Also expecting a recovery of the real estate market in the near future, Dr. Vo Tri Thanh - Director of the Institute for Strategy, Brand and Competition Research also acknowledged that the current period is very difficult for the real estate market, so the support policies of the Government, ministries and branches in the past time are very large, much larger than the crisis period in 2013.

Real Estate - Vice President of VNRea: Vietnam's real estate market is at the bottom of the — Mr. Pham Nguyen Toan - Vice President of VNRea spoke at the forum.

Sharing the same opinion with Mr. Pham Nguyen Toan, Dr. Vo Tri Thanh said that there have been many conferences and meetings of the Government and the Prime Minister organized to discuss solutions to remove difficulties for the market - these are unprecedented efforts of the Government.

According to VIRES's forecast, the market will officially recover from the end of the second quarter of 2024. However, the upward trend is quite slow and depends on many factors, both objective and subjective.

And Mr. Pham Nguyen Toan also noted that, although the most difficult period has been overcome, the real estate market still has difficulties and to resolve them, it requires courage to face the truth.

Assessing that the Vietnamese real estate market is currently at the bottom of the "U" shape, the Vice President of VNRea predicted that this cycle will continue to "move sideways" and, although very slowly, will tend to gradually increase.

Expectations from institutional dismantling

Speaking more clearly about the difficulties of the real estate market in recent times, Associate Professor, Dr. Nguyen Quang Tuyen - Vice Chairman of the Council of Hanoi Law University said that the real estate market is facing two barriers: legal institutions and access to capital.

With institutional difficulties, Mr. Tuyen commented that throughout 2023, the National Assembly, the Government, ministries and branches have made great efforts to remove legal bottlenecks.

“The proof is that after 10 years, three important laws, the Land Law, the Housing Law, and the Real Estate Business Law, have been amended simultaneously and will take effect from January 1, 2025,” Mr. Tuyen cited.

Regarding the Law on Real Estate Business, the expert said that there are some new points such as removing the issue of future housing, related to deposits; payment for future housing is made in several installments, the first installment is not more than 30% of the contract value, the second installment is not more than 50% of the contract value.

With real estate brokerage, activities have been more strictly controlled, individuals practicing real estate brokerage must have a practice certificate issued by the Ministry of Construction and are not allowed to practice independently.

With the Housing Law, some new points such as officially recognizing the mini apartment type, including the certification of granting pink books for this type; removing regulations on apartment ownership. In addition, creating conditions for real estate businesses to build social housing to reserve 20% of the land area for commercial business; expanding the target group of social housing buyers... are also highly appreciated by the expert.

The Land Law also notes a number of highlights such as expanding and regulating more open access to land for businesses; expanding land use rights for Vietnamese people residing abroad who are Vietnamese citizens, including regulations on receiving land use rights, creating conditions for them to directly participate in domestic real estate transactions... In particular, the 2024 Land Law has removed the land price framework, determining land prices according to market prices.

“It can be said that the completion of three laws related to the real estate market is a common achievement, a great effort of the National Assembly, the Government, ministries, and the entire population in nearly two years of contributing ideas and editing to perfect the law-making process,” the expert commented.

Up to now, according to Associate Professor, Dr. Nguyen Quang Tuyen, when the institution has been completed and clearly defined, the important thing now is how to implement it to remove the existing problems in the land and real estate market.

To be able to start implementing from January 1, 2025, currently, ministries and branches are urgently developing decrees, circulars, and documents guiding implementation. However, the expert said that there are still some provisions that do not wait until the beginning of 2025 but are being applied from April 1, 2024.

“I hope that the legal solutions will be quickly implemented and effective in helping businesses in 2024 and the following years to flourish, bringing more efficiency and practical benefits, not only for businesses but also for the people and the country to benefit from the issued policies,” Mr. Tuyen expressed .

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