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Tourism, resort, industrial real estate is the highlight of the market

Investors Mr. Nguyen Tran Nam, Chairman of Vietnam Real Estate Association (VNREA), said that the real estate segment of tourism, resort and industrial real estate are bright spots in the medium and long term.

FDI capital into real estate business increased sharply

At the forum, Mr. Nguyen Tran Nam, President of VNREA, assessed that, during the past 3 years, despite of many difficulties and fluctuations, in general, Vietnam’s real estate market basically still has the development is more stable, healthier and more professional and has reduced the risks compared to the previous period.

“It can be said that Vietnam’s real estate market is increasingly showing its particularly important role in the economy and a driving force for development for many other industries, markets and markets. From the beginning of the year until now, the international situation as well as the region has been complicated and had many unfavorable factors. These factors have caused sales and profits of businesses listed on the stock market to decline, ”Mr. Nam said.

According to Mr. Nam, the majority of Vietnamese real estate enterprises are still quite small, the main source of development capital is bank loans and deposits from customers. Meanwhile, the Government has taken many measures to restrict the flow of loans to the real estate market, the credit growth rate plummeted, making businesses encounter certain difficulties.

Besides, due to legal problems, some segments such as condotel, officetel are no longer as vibrant as the previous period. In addition, the implementation of regulations on planning, construction, land, land clearance, etc., including administrative procedures, has also been tightened, drastically reducing projects that have been approved and implemented.

He said, following the trend of the economy and as forecasted by the Vietnam Real Estate Association since the end of 2018, the real estate market has been and will face certain difficulties and show signs of decline.

The real estate market still maintains stability, based on positive factors of macroeconomics. Despite many difficulties, but due to the Government’s effective efforts to manage policies and economic reforms, it has produced positive results on socio-economic growth and macroeconomic stability.

The President of VNREA analyzed the huge demand for housing in Vietnam. Along with becoming the 15th most populous country in the world, ranked 3rd in Southeast Asia, Vietnam is also the country with the increasing demand for housing in the leading urban areas in the region. Vietnam’s population structure is the main and sustainable source of the housing market due to real demand for accommodation.

The migration combined with natural population growth creates a great demand for housing in cities like Hanoi and Ho Chi Minh City. The process of urbanization takes place at a high speed, the urban population will increase rapidly, especially in large cities; The per capita income is increasing … leading to the fact that every year, Vietnam has to build about 100 million square meters of new housing, of which about 70% of houses are to meet the needs of urban population.

Land for development is huge for the segment of tourism real estate, resorts and industrial real estate. These are bright spots in the medium and long term. “Tourism and resort real estate has great development potential, based on the nature, culture and institutions, especially in the context that ministries and localities are actively implementing Resolution 08. of the Politburo, the number of tourists is growing well. The trend of investing in this segment must be towards large-scale and high-class products aimed at the fast growing middle class, “Mr. Nam said. .

In addition, he added, FDI investment in real estate business increased sharply and more and more substantially, focusing on investing in new infrastructure. Over the past decade, Vietnam has focused on developing infrastructure, so that the total investment of infrastructure so far has accounted for more than 10% of GDP on average, surpassing the East Asian economies, which are floating capital. known for high infrastructure investment.

Within 7 years from 2012-2019, the whole country had an additional 838km of highways to be newly invested, completed and put into use. These are all key projects, inter-regional connectivity, creating tremendous motivation to promote socio-economic development.

Real estate opposite many wake

Evaluating an overview of Vietnam’s real estate market at the present time, Mr. Nam said, real estate is facing many challenges.

Specifically, the system of legal documents related to the real estate market is not synchronized. The legal corridor adjusting the real estate market, from construction investment, transactions to management and use of real estate, is slowly being completed and overlaps; Many problems arise from practice and inadequacies of the policy mechanism but have not been supplemented and amended in time, resulting in the real estate market being not managed and controlled effectively.

The market is facing many difficulties when it is required to wait for many laws and related documents in the adjustment and completion stages such as the Law on Planning, Land, Housing, Construction and Real Estate Business. ..

Difficulties in administrative procedures and big pressures from the policy of more strict control of licensing new projects. The slowdown by the authorities to approve the construction permit or suspend the ongoing project to review, check … is the cause of the supply reduction, leading to the reduction of real estate transactions. On the other hand, the planning, compensation, project approval … are tight while the demand for project implementation of investors is very high.

Real estate businesses have difficulty accessing capital. Currently, the bank’s credit activity in real estate business is tightening. Interest rates continued to be high (deposit rates up to 8.7%, plus a margin of 3%, lending rates up to 11-12%); short-term funds for medium and long-term loans continue to decline from 45% to 40%, the risk ratio for real estate loans increased from 150% to 200% … making banks more cautious. real estate business loans.

Recently, the re-occurrence of the widespread sale of plots and the virtual price fever in some localities, the fraud of selling “ghost projects” has become common. Many places happen the situation of buying, selling and transferring houses and land without fully meeting legal conditions and bases. The subdivision of land sale does not solve the accumulation for the size of the economy but also creates deviations in planning as well as traffic congestion, causing great confusion for the urban face. .

Lack of information systems on the real estate market and concerns about market transparency. Accordingly, in Vietnam’s real estate market, the low information transparency has hindered the investment process of foreign investors in the market. The cause of the above situation is mainly due to the slow implementation of measures to make the real estate market transparent and stimulate investment. Specifically, build a national database system of information on registration and real estate transactions.

(Sourse by: