Based on the real estate business performance last year, experts believe the market will experience many difficulties this year, according to a news report by Sai Gon Giai Phong.

Condo buildings are under construction in the outlying district of Nha Be in HCMC 

In 2017, HCMC earned VND27.17 trillion from land-related budget collections, accounting for 11.75% of its total budget revenue, and nearly 66% of the amount, VND17.9 trillion, was generated from land use fee payments for property projects.

Last year, the city’s domestic budget collections were recorded at VND268.78 trillion, with land-related revenue making up an estimated VND22.6 trillion and with payments of property projects accounting for just over 61%.

It can be seen that land-related budget collections declined by 16.8% at some VND4.57 trillion, and collections from projects dropped 22.5%, or VND4.04 trillion. Besides this, budget revenues from enterprises and individuals as of November 30, 2018, amounted to VND3.013 trillion.

The downward trend may continue this year.

The size of the property market also witnessed a considerable decline last year.

In particular, there were 92 housing projects in the making, with 42,991 units in 2017, including 37,502 apartments and 5,489 low-rise houses. Of these, the high-end, mid-end and low-end segments accounted for 25.5%, 45.5% and 29%, respectively.

Meanwhile, last year saw 77 housing projects providing 28,316 units, resulting in the market scale falling by more than 34% against the previous year. The respective proportions of each market segment were 30%, 45.3% and 24.7%.

These figures indicate unsustainable market development. The property market’s development is only sustainable when it records a reasonable product structure, with the largest share going to the low-end segment, followed by the mid-end and high-end segments.

Le Hoang Chau, chairman of the HCMC Real Estate Association, said that these are all worrying signs. The property business in HCMC has been in trouble until early this year. In addition to limited new projects, projects approved years ago now need to be put under review.

According to experts, one of the reasons for the decline in housing supplies in the past and this year concerns the procedures for investment approval. This may lead to declining budget revenues this year as not only property enterprises but also businesses in some 95 other areas are affected.

Besides revisions to the investment law, the HoREA recently proposed amendments to the housing and land laws to ensure the consistency of the legal system with regard to investment approval, investor selection and investor approval.

SGT