Update news real estate market
Real estate firms in Vietnam continue to face difficulties as real estate shares fluctuate unpredictably.
Many offers to sell property with attractive discounts of up to hundreds of millions of dong still exist, but houses remain very expensive.
The Ministry of Construction (MOC) has proposed that the government conclude that housing ownership by foreign individuals should not include not land-use rights. In addition, foreigners should be allowed to extend the house ownership period once.
Mergers and acquisitions between domestic and international real estate developers were down in the first half of the year, but could be a future bright spot with Vietnam boasting attractive economic fundamentals and investors biding their time.
Many enterprises have had to sell assets and subsidiaries to get cash and survive the current difficult period, as the property market faces weak liquidity and a decline in revenue.
Cocobay Da Nang, the super project in Da Nang, and a multi-billion dong golf course in Bac Giang were the leading news items last week.
The Vietnam Association of Realtors (VARs) has reported that more than 90 per cent of the real estate exchanges recorded a decrease in revenue in the first quarter of this year compared to the same period last year.
Pumping money into real estate firms is like pouring money into a bottomless pocket. Instead, the government needs to spend money as ‘bait capital’ to attract investors to the market.
The land and houses in the Old Quarter of Hanoi are at sky-high levels. In some areas, the price of one square meter is equal to the value of an entire apartment in the non-central business area.
The Economic Committee of the National Assembly (NA) has recommended against making it mandatory for real estate products to be traded through an exchange, citing concerns over potentially higher prices and fees.
Predictions about real estate firms remain worrisome. Twenty-three businesses will not be able to maintain operation until the end of the third quarter and only 43 percent will exist by the end of the year unless conditions approve.
As the real estate market is stagnant, building materials are abundant, but shortages exist for road-bed composition and foundation for transport infrastructure projects.
The demand for social housing will be eased as many projects are about to be launched on the market. The average housing price in HCM City is 32 times higher than the average income of Vietnamese.
This capital, according to HoREA, should be used to assist enterprises that are experiencing hardships but have the potential to be rehabilitated.
Local experts are hopeful for a potential but gradual rebound of the real estate market in HCMC.
The sluggish real estate market has left adverse impact on property brokers and developers nationwide, with operational real estate brokerages accounting for 30-40% of the total in late 2022.
In April, real estate lost the second position in the ranking of business fields most attractive to foreign investors. In May, as many as 554 real estate firms were dissolved.
The State Bank of Vietnam (SBV) is set to further reduce regulatory interest rates on May 25, the third cut in a row since mid-March, expected to give a boost to the stagnant real estate market.
Prices range from hundreds of millions of dong to half a billion dong per square meter, but penthouses still are selling well as more ultra-wealthy people accept sky-high prices.
Decree 10 is considered a good sign for project developers and buyers of condotels, with some experts predicting that the move will remove long-standing problems in the issue of ownership certificates for condotels.