Prospects for the real estate market from supportive policies

VCN - The Government has taken drastic actions to remove legal obstacles, creating conditions for the real estate market to develop transparently, healthily, safely and sustainably. Customs Magazine had an interview with Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA) about this issue.
Strong decentralization to speed up the progress of real estate arrangements Strong decentralization to speed up the progress of real estate arrangements
Demand for real estate in industrial park is growing positively Demand for real estate in industrial park is growing positively
Prospects for the real estate market from supportive policies
Mr. Le Hoang Chau, Chairman of Ho Chi Minh City Real Estate Association (HoREA)

Sir, how have the Government's recent solutions supported the real estate market?

Since the beginning of the year until now, the Government, ministries and branches have implemented many support solutions to recover the real estate market. Specifically, on March 5, the Government issued Decree No. 08/2023/ND-CP to resolve bond issues. On March 11, the Government issued Resolution 33/NQ-CP on solutions to solve and promote the development of the real estate market. On April 3, the Government issued Decree 10/2023/ND-CP on amending and supplementing a number of articles of decrees guiding the implementation of the Land Law, opening the door for the issuance of Condotel books; Accompanied by a succession of documents to lower interest rates from the State Bank, it is said to be a factor that has had a positive impact on market demand in recent times.

Most recently, the Prime Minister issued Official Telegram No. 993/CD-TTg dated October 24, 2023 on continuing to drastically implement solutions to develop a safe, healthy and sustainable real estate market, contributing to promoting socio-economic development. The telegram is like a push, showing the determination of the Government, ministries, branches and localities in solving difficulties for real estate.

In Official Telegram 993, the Prime Minister requested localities to review and compile statistics on the number of real estate projects being implemented in the area; classify projects that are facing difficulties and problems; Proactively work directly with each enterprise and each project that has problems or slow implementation to clearly identify the causes and promptly remove difficulties and obstacles within its authority; summarize difficulties and problems beyond authority and send them to the Prime Minister's Working Group for consideration and resolution or report to competent authorities for timely consideration and decision.

The Prime Minister also requested the Governor of the State Bank to direct commercial banks to continue promoting credit lending to the real estate sector; have appropriate solutions to reduce costs to reduce interest rates; continue to review and further reduce inappropriate, troublesome and costly administrative procedures so that businesses, real estate projects and home buyers can access credit capital more conveniently. There are special credit promotion policies for feasible real estate projects with fast implementation progress, creating motivation for growth and promoting the real estate market...

In addition, currently the drafts of the Housing Law (amended) and the Real Estate Business Law (amended) are being completed, and the Government's policies to remove difficulties for the real estate market are continuously being issued. I have great expectations for drastic solutions from the Government and ministries to develop the real estate market in a transparent, healthy, safe and sustainable manner.

With the above positive moves, how do you evaluate the real estate market in the coming time?

Signs of recent transactions in the real estate market have been better than at the beginning of the year. Specifically, according to data from the Ho Chi Minh City Department of Construction, the bottom of the real estate market is from the first quarter of 2023, when the growth of the real estate sector was negative 16.1%, but then gradually improved. At the end of the second quarter of 2023, real estate still had negative growth of more than 11%, but from the third quarter it was only negative more than 8%.

In the first 9 months of 2023, Ho Chi Minh City has had 15 commercial housing projects confirmed to be eligible to sell and lease purchase housing products formed in the future with 15,020 units put on the market (including 13,767 shared apartments and 1,253 low-rise houses), of which the high-end segment has 9,969 units and the mid-end segment 5,051 units, with no housing in the affordable segment. Thus, the housing supply put on the market in the first 9 months of 2023 increased by 17.6% over the same period last year.

One of the credit packages that are expected to create momentum for the real estate market recently is the VND 120,000 billion loan package for investment and development of social housing projects. Vietnam Bank for Agriculture and Rural Development (Agribank) said that from the first day of implementing this credit package, VND 30,000 billion has been registered.

Although the real estate market shows signs of improvement after the Government's solutions to remove difficulties, the market has passed the bottom but there are still many outstanding issues that need to be resolved.

In your opinion, why is real estate past the bottom but why is it still difficult to become vibrant again?

Legal problems in the current real estate market are the biggest problems, accounting for 70% of the difficulties of real estate and housing projects. Specifically, the biggest problem is that some regulations lack uniformity, contradictions, and conflicts of law. Some regulations in by-law documents related to the real estate sector are also problematic, in particular, problems in law enforcement at departments and branches. Despite the same document, some localities have resolved it relatively well while some localities have not been able to resolve it, causing congestion for local projects.

Along with that, there are problems in accessing capital. In addition to equity, real estate businesses have recently relied on a number of other sources of capital such as capital from the stock market, capital from corporate bonds, but since the third quarter of 2022, bond capital has been clogged and has come to an end. Currently, the bond market is still troubled despite Resolution 08 for adjustment.

Currently, businesses are also facing another important problem, which is credit from commercial banks. This is a source of bait capital, acting as a "midwife" and a great support for businesses, but it has not yet been exploited. The remaining capital is from customers and partners, but when the initial problems are not cleared, this problem will also be blocked.

In addition, it is necessary to continue to remove bottlenecks in inadequate regulations and loosen conditions to help buyers access social housing more conveniently. It is necessary to soon raise both the personal income tax rate and the family deduction level by at least 25%. That means increasing the minimum income not subject to personal income tax from VND 11 million to VND 13 million and increasing the family allowance from VND 4.4 million to VND 5.5 million per month.

By Thu Diu/Bui Diep

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