Difficulties in real estate market to last until late 2024: experts

By Duc Minh   March 12, 2023 | 11:45 pm PT
Difficulties in real estate market to last until late 2024: experts
Office buildings, villas and apartment blocks in south HCMC. Photo by VnExpress/Quynh Tran
Experts are predicting that difficulties in the real estate market will last until the end of next year.

At the Spring Real Estate Forum on Friday, Nguyen Quoc Hiep, president of the Vietnam Association of Construction Contractors, cited three main reasons for the prolonged difficulties in the market.

First, a new Government decree issued on March 5 to loosen control on corporate bond issuance, can only help prevent the market from collapsing, but cannot save the entire bond market and investor confidence, Hiep said.

Noting that a large amount of corporate bonds will mature this year, he proposed putting a cap on bond issuance to better protect bondholder interests.

Second, bank credit for real estate developers has decreased sharply, making their operations difficult; as a result;, businesses in the future will be more cautious in accessing loans, and even afraid of borrowing.

Third, legality-related issues are not certain to be quickly settled in favor of real estate firms. They are very cautious because it is not certain that the three laws on land, housing and real estate business that will be revised in the coming time will "untie them or tie them up," he said.

Sharing the view that the difficult situation will continue for a while, Do Viet Chien, vice chairman of the Vietnam National Real Estate Association, expressed a fear that it will take time for decrees and circulars on guiding the implementation of the three potentially amended laws to be promulgated.

To revive the stagnant property market, Nguyen Van Dinh, vice president of the Vietnam National Real Estate Association, said the State should quickly promulgate specific regulations to implement the VND120 trillion (US$5.08 billion) package for social housing development that the central bank announced recently,

Dinh also suggested that in addition to capital for social housing the State should pay attention to mid-range and high-end real estate projects which have neared completion but have come to a standstill because of running out of money.

According to Dinh, real estate companies should have restructuring plans suitable to the economy and the availability of resources, and restructure their product lines so that they can be easily sold.

"Enterprises, including high-end housing developers, should also include social housing in their business strategies," Dinh added, explaining that social housing will help them operate in a more stable and sustainable manner.

Economic expert Dinh Trong Thinh said regaining confidence from investors is also a way for businesses to save themselves, in addition to the supportive actions of the government. Businesses should take specific actions such as paying interest on time to bondholders in various ways and actively negotiate with them.

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