Change to adapt to the actual situation

VCN – Customs News spoke to Nguyen Van Dinh (Photo), Vice Chairman of Vietnam Real Estate Association.
Need to synchronously and effectively develop the real estate market Need to synchronously and effectively develop the real estate market
Investment business of insurance enterprises are managed more strictly Investment business of insurance enterprises are managed more strictly
Developing a safe and healthy real estate market Developing a safe and healthy real estate market
Change to adapt to the actual situation
Mr. Nguyen Van Dinh

What is the biggest difficulty of the real estate market now and what are the solutions to this problem?

The real estate market currently has few real transactions. Because there is no source of goods, the price is high, so if people with demand do not accept to buy, the supply and demand will go in parallel and there is no absorption. Fewer transactions on the market, the risk of freezing will be high.

In that context, project developers must look for suitable products for actual needs, towards the real needs of the majority, such as affordable housing, social housing, which are in great need.

Simultaneously, these are also products that are suitable for business activities and especially the prices are not virtual and bubble prices. In my opinion, macro policy should be regulated and managed in a synchronous manner to handle this problem. When the market has active transactions with suitable products for the market and the needs of society, it will return to balance.

From the perspective of enterprises, when the business context changes, enterprises will have to actively adjust their business strategies. They must choose suitable products for the real needs of the majority of people and investors.

In recent years, businesses, from "sharks" to small units, have realized that the mass market segment must be targeted. At a recent social housing development conference, large enterprises registered to build 1.2 million social housing apartments. This is also their new business strategy when they choose and start looking for a segment that suits the needs of the market, besides the high-priced segments that are difficult to absorb. This is very encouraging.

In addition to shifting investment strategies in investment products, there has been a recent trend that project developers have been aiming to invest in new potential lands, instead of investing 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 of the market. Of course, investors will have to look for markets that have space, opportunities, and potential for development.

Like the ecosystem in a forest, many opponents can fight to the death for food. When they cannot find food, of course, there will be species that choose not to go to that forest anymore, but to find another land that is more comfortable, and abundant in food. The real estate market is the same. Small businesses find it difficult to survive in high-priced places and have to look for other development areas.

Currently, the speed of urbanization and infrastructure development through the promotion of national public investment is taking place strongly in many areas, which is favorable for the investment projects of enterprises. Besides, Vietnam's growth is uniform in many regions, and most localities have certain advantages. Now localities, especially newly developed provinces, are promoting to fully exploit advantages to attract investment. Of course, businesses need and will quickly find investment opportunities in these potential places. That shows the flexible and necessary adaptation of businesses and investors in the context that many difficulties of the market have not been removed.

From a macro perspective, what recommendations do you have to solve the current difficulties in the market?

In the current context, I think that not only businesses but also management agencies need to make changes to adapt to the actual situation.

First, the management agencies need to adjust law provisions to deal with the availability of goods for the market. There should be regulations as a basis for localities to boldly approve projects, and guiding regulations to ensure proper approval, thereby increasing the supply to the market, especially to the segment with high actual demand. Only then will the market have high absorption and transactions, thereby stimulating other activities.

Second, capital solutions must be accelerated, especially after the legal regulations related to banking credit activities are tightened. I agree that we must be very careful to prevent the risk of failure in the banking system, and the risk of monetary insecurity. Therefore, I think that the source of capital for the real estate market should be directed to corporate bonds. To "regain" this market, regulations must be directed to market protection. Moreover, the control and prevention of violations in the market must be implemented closely to create confidence for investors. Thus, new issuers can issue bonds on a sufficiently large and efficient scale, thereby increasing capital for real estate businesses to develop projects.

Thank you, sir!

By Thu Hien (recorded)/ Ha Thanh

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