VCN - Customs News spoke to Mr. Nguyen Van Dinh (Photo), Vice Chairman of Vietnam National Real Estate Association.
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What is the biggest difficulty the real estate market is facing and what is the solution?
The real estate market currently has few real transactions. The supply is not available and the price is high, those who have demand cannot afford to buy, leading to failure in real estate transactions or very few transactions, so the risk of freezing is very high.
Therefore, project developers must develop products suitable to actual needs, towards the real demand of the majority of the population, such as affordable and social housing products that are in great need, and are suitable for business activities and especially of which prices are not virtual.
In my opinion, policy should regulate and cover issues to solve this problem. When the market provides products with reasonable prices and meets the needs of society, then the market will return to balance.
From the perspective of enterprises, when the business context changes, enterprises will have to actively adjust their business strategies; they have to choose products that are suitable for the real needs of the majority of people and investors.
Actual research shows that businesses, from "shark" businesses to small businesses, have begun to realize that the mass market segment is a target. At a recent conference on social housing development, large enterprises registered to build 1.2 million social housing apartments. This is also a new business strategy of large enterprises when they choose and start looking for a segment that suits the needs of the market, besides the high-priced segments. This is very encouraging.
In addition to shifting strategies in investment products, a recent trend is that project developers have been aiming to invest in new potential lands, instead of racing to invest in central cities as before. What do you think about this trend?
The fact that enterprises change their investment strategies in new lands is also a problem for the market. In places that have room, opportunity, and potential for development, investors will surely have to find themselves.
Like the ecosystem in a forest, many competitors can fight to the death for food. When they can't find food anymore, of course, there will be competitors who choose not to go to that forest anymore, but to find another more comfortable land, with abundant potential for food.
The real estate market is the same. In places with high prices, of course, small businesses find it difficult to survive in those places and have to find others.
Currently, the speed of urbanization and infrastructure development through the strengthening of national public investment is taking place in many areas, which is favorable for the investment projects of enterprises.
Besides, a strong point in Vietnam is uniform growth in many regions, and most localities have certain advantages. Currently, localities are trying to fully exploit their advantages to attract investment, especially newly developed localities, and enterprises will want and quickly seek investment opportunities in these potential lands. That shows the flexible and necessary adaptation of businesses and investors in the context of difficulties in the market.
From a macro perspective, what recommendations do you have to solve the current difficulties?
I think that, in the context of difficulties in the market, not only businesses but also management agencies need to make changes to adapt.
From a macro perspective, first of all, the management agency needs to revise the provisions of the law to solve the supply for the market. There should be regulations as a basis for localities to approve projects, and ensure proper approval, thereby increasing supply for the market and especially increasing supply into the segment with high practical demand. Thus, the market has a high absorption rate and number of transactions, thereby stimulating other activities.
Secondly, capital solutions must be accelerated, especially after the legal regulations related to banking credit activities are tightened. I agree that for now, extreme caution must be taken to prevent a banking system crash, so I think that the capital source for the real estate market should be channeled to corporate bonds.
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