The National Assembly’s Economics Committee chair Vu Hong Thanh on October 28 presented a report on the laws and policies on real estate market management and social housing development in 2015-2023.

Businesses cannot access land 

According to Thanh, during that period, the scale and value of the real estate business increased year after year, from VND83.248 trillion to VND121.09 trillion, which meant an average growth rate of 2.72 percent per annum. There were 3,363 commercial housing and urban development projects under implementation, which use 11,191 hectares of land.

Supervisors found it difficult to access land for new real estate projects and to access bank loans as the interest rates were high. Realtors have tended to seek capital in the corporate bond market through privately issued bonds.

Real estate prices are very high compared with the income of the majority of people. Many urban areas have been left deserted, while old collective quarters cannot satisfy standard living conditions.

Uncertainties in newly recovered market

Nguyen Thi Thuy, a National Assembly deputy from Bac Kan, said land prices in some large cities, especially Hanoi and HCM City, have increased too sharply recently. As a result, the real estate market, which has just recovered, is witnessing signs of uncertainties. 

Thuy said voters have shown their concerns about real estate price inflation. The prices of land and housing products in some areas have become unrealistically high. The Ministry of Construction (MOC) said the sharp price increases are "unreasonable and abnormal".

The National Assembly deputy said that realtors tend to develop high-end products while paying less attention to affordable housing. This has led to a scarcity of affordable apartments, posing risks.

“The speculation and price inflation has led to serious consequences. People’s don’t have money to buy housing products, while other people buy houses and then leave them unused,” Thuy said.

She proposed that the government set policies to encourage realtors to develop common housing products affordable for the majority of people, and take drastic measures to control land speculation.

Pham Van Hoa, a National Assembly deputy from Dong Thap, confirmed that the real estate market is now witnessing land fever. The prices have been pushed up to sky high levels, but they still sell. 

But the buyers are not those who have demand for accommodation, but investors and speculators. In many cases, land plots are resold just a short time after investors buy them.

“The price changes all the time,” Hoa said.

If the state has reasonable policies and simplifies administrative procedures to speed up the implementation of real estate projects, especially social housing, the market would no longer see artificial fever.

No more affordable houses in Hanoi, HCM City

In 2015-2023, the real estate market step by step satisfied people’s demand for accommodations. 

However, in 2022-2023, the market declined with real estate firms facing difficulties because of problems in 2015-2021. 

The real estate prices soared, while affordable apartments in Hanoi and HCM City no longer existed.

A report of the Hanoi People’s Committee said mid- and high-end apartments accounted for a large proportion. A lot of projects have been going very slowly because of legal and administrative problems.

In Hanoi, 404 projects faced problems, of which 158 have been settled. The figure was 220 in HCM City. Real development in Hanoi has been very slow in the last three years, with no new project licensed. The products marketed recently were mostly from projects licensed in the previous period.

Social housing

In 2015-2023, about 800 social housing projects with 567,000 apartments were deployed. Of these, 373 projects have been completed with 193,000 apartments, 129 projects have kicked off with 114,000 apartments, and 298 projects have got approval for investment with 258,000 apartments.

“In general, the policies and laws on social housing in 2015-2023 were unstable. The guidance for implementing the policies was not clear enough, thus making it difficult for localities to develop social housing,” the National Assembly’s report says.

Quang Phong