Tightening capital, the real estate market will not develop

Speaking at the symposium Realizing the role of the market real estate in the background economy Organized by VnEconomy/Vietnam Economic Magazine/Vietnam Economic Times on May 6, Nguyen Manh Khoi, Deputy Director of the Housing and Real Estate Market Management Department (Ministry of Construction), said from the fourth quarter of this year. In 2021, when localities gradually lift restrictive measures against the epidemic and at the same time reactivate production activities and economic development in the context of the new normal, investment, business and real estate market activities will be affected. Real estate has made a lot of progress.

The brightest point is that the real estate inventory is almost nonexistent, the project goes out and consumes it all.

According to aggregated data from reported localities, the number of real estate transactions increased sharply compared to the third quarter of 2021. The average price of apartments (including affordable, mid-range and high-end apartments) in the fourth quarter of 2021 increased slightly by 3-5% compared to the previous quarter. In particular, there are areas with an increase of 100%, 70%, especially land plots, areas bordering big cities, prices increase by 15-20%. In contrast, tourism real estate compared to the same period in the first quarter of 2021 was basically reduced, compared to the fourth quarter of 2021, it was almost flat.

Assessing the challenges of the post-Covid-19 real estate market, according to Mr. Khoi, there are five points to note.

The first is legal. In the past time from 2020, the National Assembly, the Government and ministries have promulgated many policies and laws, removing many difficulties with real estate such as the Law on Construction, the Law on Investment, a series of The Government’s decree, but right at the time of the COVID-19 epidemic, the impact of the Law has not been practical, so it is still difficult.

Second, the supply is increasingly lacking, seriously lacking in all segments. In the context of the epidemic, investors still consider real estate as a safe haven, then gold and securities. Therefore, it is necessary to have solutions to stimulate supply and demand, remove legal procedures for projects, especially social housing projects. Only in the period from April 25 to 19, Ho Chi Minh City started 5-6 social housing projects at a time, many situations also started construction, most of which were difficult projects from 2020-2021 to be deployed.

Third, is capital. Capital is one of the factors that cannot be underestimated in real estate business. The capital market is closely tied to real estate. Besides real estate businesses with large resources, many businesses still depend mainly on credit sources, but recently there have been some regulations to tighten credit on real estate. “If the capital market is tightened, the real estate market cannot develop. The Ministry of Construction is also proposing to amend Decree 153 on the principle that not all real estate businesses can provide the same capital, but should prioritize capital for projects and limit which projects.“, said Mr. Khoi.

Fourthly, localities must also strictly control the division of plots for sale and land auction, because these are two issues that have a terrible impact on the market. Just one project needs to increase the price of a series of projects. That is the limitation that the locality needs to strengthen management to limit market distortion.

Fifth, recently there has been a situation of linking to make prices between the floor and the investor, between the exchanges, between the exchanges and the broker or the investor who does not sell goods in association with the price raising floor, causing interference. information disorder.

The Ministry of Construction has proposed to the Government, the Government agreed to submit to the National Assembly to amend a number of laws, of which 3 laws, if corrected, such as the Law on Land, the Law on Housing, the Law on Real Estate Business, will open up the market. develope. The National Assembly also agreed to bring the Law on Bidding to be revised.

“Many integrated solutions are needed, not only from the perspective of the Ministry of Construction, but also the Government and other ministries and sectors. I believe that, in order for the real estate market to develop, we must implement many of the above solutions“, Mr. Khoi emphasized.