Each week we post a news flash with notable articles related to the real estate market in Vietnam. We asked our team to pick the top stories from the past month and we’ve tallied the results. Check out the headlines that made big news in our office below. Have any of the articles we’ve shared impacted you? Is there any important news we’ve missed? We’d love to hear from you!

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Content

1. Overview of one year with effort to rescue the real estate market of the Government

2. Investors should enter the market early before real estate prices increase in 2024

3. Outstanding events in the real estate market in 2023

4. The door is gradually opening for real estate businesses

5. What type of real estate will investors prioritize in 2024?

6. The real estate market in Vietnam showing signs of recovery

1. DECEMBER 2023 CENTRAL VIETNAM REAL ESTATE NEWS SUMMARY

1. Overview of one year with effort to rescue the real estate market of the Government

In 2023, the real estate market faced challenges addressed by various government policies. Starting in late 2022, the government issued instructions to alleviate legal and capital obstacles in the real estate sector.

A pivotal February 2023 conference, led by government officials, assessed market conditions and proposed solutions for healthy and sustainable development. March saw the issuance of Decree 08, facilitating negotiations between real estate businesses and bondholders, while Resolution 33 provided additional solutions for market development.

Decree No. 10 addressed legal issues in resort real estate, while an August 2023 online conference evaluated progress and proposed further solutions. The government also directed the State Bank to reduce lending rates to support economic recovery. Notably, in November 2023, the National Assembly passed amended Housing and Real Estate Business Laws. A December 2023 dispatch emphasized continued efforts to ensure the market’s safe and healthy development amid positive changes. The second half of 2023 showed signs of improvement, with increased market liquidity and abundant supply. As 2024 approaches, government policies are expected to sustain positive momentum in the real estate market.

Source: cafebiz.vn

2. Investors should enter the market early before real estate prices increase in 2024

The article emphasizes that there are positive signals in the real estate market, presenting an opportunity for investors to enter early before real estate prices rise again.

This quotes some data and insights from experts. The Ministry of Construction and the Vietnam Real Estate Brokers Association both observe a clear recovery in the real estate market. Another market research firm notes the emergence of investment capital from “bottom fishing” investors in the third quarter of 2023. It is forecasted that the real estate market will experience positive changes in the fourth quarter of 2023 and become more evident in the first half of 2024, thanks to the decreasing interest rates for real estate loans and the continuation of this trend shortly.

Experts and businesses in the real estate industry believe that the market is on a clear path to recovery, with a more distinct cycle expected in the second or third quarter of 2024. This advice encourages real estate businesses to seize this opportunity to prepare in terms of resources and inventory. Furthermore, investors are recommended to choose and purchase real estate at the best prices before the market fully recovers and prices continue to rise sharply in the third quarter of 2024.

The article also mentions the decreasing interest rates, which alleviate financial pressure for investors, and a shift in investment capital back to the real estate sector. The forecast indicates a recovery in the real estate market in 2024, and investors should consider entering the market at this time.

Based on the information provided, the article concludes that investors should participate in the real estate market early to leverage the opportunity and acquire properties at favorable prices before the market experiences a significant recovery and prices increase in 2024.

Source: cafef.vn

3. Outstanding events in the real estate market in 2023

The National Assembly of Vietnam recently passed amendments to the Housing Law and the Real Estate Business Law.

The revised Housing Law introduces notable changes, including tighter regulations on the investment in mini-apartment buildings. Additionally, it designates the Vietnam General Confederation of Labor as the governing body for social housing projects for workers and laborers. The amended law does not specify ownership duration but focuses on the period of use for condominiums based on the current Housing Law.

Simultaneously, the National Assembly approved amendments to the Real Estate Business Law, imposing stricter provisions on real estate transactions to protect property buyers and land users. Notably, it limits the deposit for real estate transactions to 5% of the selling price or lease amount and introduces measures to prevent unqualified real estate business activities. Both laws are set to take effect on January 1, 2025.

However, as of November 22, the National Assembly has not yet passed amendments to the Land Law. A shift in the approval timeline was made to allow for further examination and improvement of the draft law to ensure its compatibility, legality, and consistency within the legal system.

Efforts have been made to address challenges in the real estate market, with the government forming task forces to alleviate economic difficulties and support social well-being. Notably, a national conference held on February 17 focused on promoting a healthy and sustainable real estate market. Following the conference, Prime Minister issued Resolution 33 outlining measures to overcome obstacles and ensure the safe and sustainable development of the real estate market.

In addition, the government implemented various policies, such as Decree 08, to ease the challenges in the corporate bond market. This decree allows companies to repay principal and interest on bonds due by using other assets and extends the maximum bond term by up to two years. Notably, the designation of individuals as professional securities investors and credit rating assessments is temporarily suspended until the end of 2023.

The government also addressed the condominium (condotel) and officetel market by issuing Decree 10/2023, effective from May 20, 2023. This decree grants certificates for hotel apartments, tourist resort apartments (condotels), office-tel units, and other structures serving accommodation and tourism on commercial land, provided they meet certain conditions.

Other significant events in the real estate market include the approval of the “Investment in Building at Least 1 Million Social Housing Units for Low-Income People and Industrial Workers from 2021 to 2030” project and the implementation of a credit package of VND 120 trillion for social housing.

Despite these positive developments, the market faced challenges, including a tragic incident of a fire in a nine-story mini-apartment building in Thanh Xuan district, resulting in 56 casualties and numerous injuries. Additionally, several business leaders in the real estate sector were arrested due to legal violations, including cases of misinformation and financial irregularities.

Overall, the government and relevant authorities have been actively addressing challenges and implementing measures to stabilize and promote the real estate market in Vietnam.

Source: cafeland.vn

4. The door is gradually opening for real estate businesses

In the final days of the year, Vietnam’s real estate market is experiencing positive momentum in fundraising, with banks approving significant loans for various projects. Notably, the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) and TTC Land Company have signed a credit agreement for the TTC Plaza Da Nang complex project. Phat Dat also secured a credit package from MBBank for two residential projects. Despite banks’ cautious lending stance due to rising bad debts, real estate companies are finding alternative capital sources, with stock market fundraising expected to be a prevalent trend in 2024.

The Vietnam Real Estate Research Institute warns against excessive reliance on bank credit, emphasizing potential systemic risks. Capital restructuring, mergers and acquisitions (M&A), and the anticipation of lower interest rates globally are projected to drive real estate activities in 2024.

Source: baodautu.vn

1. 5. What type of real estate will investors prioritize in 2024?
   

The recent real estate consumer trends study reveals that by 2024. Land is the most sought-after property type (33%), followed by individual houses (26%) and apartments (24%). Despite real estate market challenges, Vietnamese demand for property ownership remains. Investors prioritize apartments and individual houses for stable cash flow and price stability. At the Vietnam Real Estate Summit 2023, experts noted a consistent rise in apartment profitability, with a 97% increase in returns since early 2015.

The study suggests a potential decrease in land prices in the short term. However, anticipates a long-term increase due to infrastructure development and economic growth. Buyers increasingly rely on data for informed decisions, emphasizing the need for quality and legal compliance in real estate projects. Experts also stress the importance of government support in overcoming financial pressures for developers. Additionally, it ensures sustainable supply while safeguarding buyer rights.

Source: baohaiduong.vn

1. 6. The real estate market in Vietnam showing signs of recovery

The Vietnamese real estate market shows signs of warming up, with improved supply from Q4/2023, mostly from subsequent phases of existing projects, yet still insufficient to meet actual market demand, especially in the affordable housing segment. Positive signals include improved demand, diverse supply from investor sell-offs, and reduced interest rates.

Investors are entering the market for properties priced from 3 to 5 billion VND, anticipating a new growth cycle starting in early 2024. Large-scale projects across the country are initiating sales campaigns, and decreasing home loan interest rates are prompting a shift towards real estate investment, driving market recovery. Various housing projects are launched, spanning from the North to the South, with statistics indicating increased sales transactions in the secondary market. To ensure a safe, healthy, and sustainable market, a balanced supply and demand are crucial, requiring state regulation through land allocation and favorable policies for affordable commercial housing development.

Source: vietstock.vn

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