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Week 19/2023 – Central Vietnam Real Estate News Summary

  1. Week 19/2023 – Central Vietnam Real Estate News Summary

    In this weekly or sometimes bi-weekly news flash – CVR: Central Vietnam Realty will provide a choice of articles from mainly Vietnamese media sources related to the real estate market in Vietnam.
    We will be focusing on issues related to Da Nang and Hoi An, while also looking at national news and their possible impact on Central Vietnam’s property market.
    You will find a summary, a link to the source as well as CVR’s take on the article.

    We believe that local knowledge is the key to making the best possible decision and that’s what we offer to all our clients.

    “CVR: Western Management – Local Knowledge”

  2. 1. When will the Real Estate market make a comeback?


In the past, the Government’s drastic direction and removal is considered a bright spot to help the real estate market “recover” and balance back soon. However, all policies need time to be put into practice and absorbed, so the real estate market is forecasted to “reverse” next year.


The real estate market has passed through the first 4 months of 2023, but the dismal pace still remains. Accordingly, the waiting situation of buyers still exists, which has dragged down market liquidity, especially in the land plot segment.


Besides, the segments serving real demand such as apartments, although the demand is still high, the supply has decreased.


Recently, the Government has issued a number of policies to help ease supply difficulties for the real estate market. Specifically, Resolution 33 of the Government was issued at the right time and was very useful for the market. The resolution has clearly indicated the issues to be solved with a specific roadmap, promoting all relevant agencies and units to participate in the implementation. This helps to strengthen trust and support the market in accordance with the safe, healthy, and sustainable goals.


Positive developments from the Government’s economic, financial, and monetary policies are creating a more positive sentiment for the market, contributing to directing real estate demand back to real value. The real estate market will reverse in 2024 in the condition that macro-management policies continue to be as positive as today.


2. Vietnam real estate market in the eyes of foreign experts


Some foreign experts highly appreciate the potential of Vietnam’s real estate market, saying that the price level can still increase in the coming time.


Mr. Eric Park, President of the Korea Association of Real Estate Services Development, and Professor of the Real Estate Department of Soongsil University of Korea, said that in Korea or other developed countries, securities are not an attractive investment channel for real estate. Vietnam’s real estate market is always at the top of Korea’s top investment priorities.


Mr. Jeffhery Foo, Chairman of the Real Estate Association of Singapore, said that he had just had a trip to Ho Chi Minh City and realized that this is a very potential market for real estate development.


Mr. Yoshi Nori Takita, Ambassador to Vietnam, Laos, and Cambodia of the President of the American Association of Realtors (NAR), emphasized that foreign investors appearing in Vietnam are very popular. However, in order to increase competitiveness and attract more foreign investors to buy, Vietnamese investors need to increase facilities such as schools, hospitals, parks, and commercial centers. …


3. New policies on housing and land take effect from May 2023


From May 20, 2023, many new policies related to the real estate market (real estate) and real estate specified in Decree 10/2023/ND-CP will officially take effect.


  1. Condotel ownership term


Accordingly, the shelf life specified in the book must be at most 50 years. Particularly for projects with large investment capital but slow capital recovery, located in areas with complex or extremely difficult socio-economic conditions, the land lease term shall be at most 70 years.


With this decree, the works of apartments, hotels (condotels), townhouses – tourist villas, and offices combined with accommodation (officetel) built on commercial and service land will be granted pink books.


  1. Change of authority to issue red book


According to current regulations, Clause 1, Article 37 of Decree 43/2014, as amended by Decree 01/2017, stipulates that in localities that have established a Land Registration Office, the Department of Natural Resources and Environment shall issue certificates in the following areas: case: When the land user exercises the rights such as buying and selling, changing the use purpose… but must issue a new Certificate; Issuance and renewal of Certificates.


Thus, Decree 10/2023 has amended the authority to issue red books and confirm changes to the Certificate in the direction of creating convenient conditions for people in carrying out this administrative procedure (made at the Office of the Government of the Socialist Republic of Vietnam). land registration office without going to the Department of Natural Resources and Environment).


  1. Regulations on online red license issuance procedures


The dossier-receiving agency is responsible for checking the completeness of the dossier components; The agency handling administrative procedures for land is responsible for the correct implementation of the authority and time prescribed by law, but not responsible for the contents of the documents and papers contained in the dossier that has been approved. agencies or other competent persons approved, appraised, approved, or settled before.


The connection, sharing of data, electronic communication between agencies to carry out the settlement of administrative procedures, and payment of financial obligations of the requester to carry out the functions shall comply with the provisions of the law on administrative procedures. carry out administrative procedures in the electronic environment and the law on the implementation of the one-stop-shop mechanism.


  1. Conditions for participating in the auction of land use rights


Subject to land allocation or land lease by the State according to the provisions of Articles 55 and 56 of the Land Law. In the case of auctioning a land plot or a project consisting of one or more land plots in which two or more companies have cross-ownership in accordance with the law on enterprises, only one company may participate in the auction of the right to participate in the auction. land use on; Satisfying the conditions specified in Clause 3, Article 58 of the Land Law, and Clauses 2 and 3, Article 14 of this Decree; Must pay a deposit equal to 20% of the total value of the land plot, the land plot calculated at the starting price for the auction of land use rights; Not being banned from participating in auctions as prescribed by law; Satisfy the conditions prescribed by the law on housing and the law on real estate business in the case of auctioning land use rights to implement housing projects or other real estate business projects.


4. Hoi An Ancient Town: Favorable Buyer’s Market with Attractive Property Options


As noted, on Tran Phu, Nguyen Thai Hoc, and Le Loi streets in the center of Hoi An ancient town, many houses are being sold for tens of billions of dong up to hundreds of billions depending on the location and area of the apartment or home.

The selling price of real estate in Hoi An ancient town has decreased, but it is difficult to have successful transactions because the houses here are priced at several tens of billions of dong. While bank interest rates are still anchored high, along with the quietness of the general real estate market.


Why it’s important: the article shows that it’s a really favorable market for buyers in Hoi An with many choices and a high chance to get a good price.


5. Da Nang transport activities grow strongly in April


According to the Da Nang Department of Transport, along with the positive recovery momentum, transportation activities in April 2023 continued to grow strongly.


In detail, the passenger traffic volume in April went up by 30.5% over the same period in 2022 to reach 77.4 million and climbed up by 30.4 % to hit 285.6 million as accumulated in the first 4 months of this year.


Why it is important: This is a positive sign to boost Da Nang tourist development and attract investors.


6. Will there be another round of interest rate cuts soon?


At the DINSIGHTS Banking Industry Outlook program organized by VNDirect on May 11, Mr. Pham Thien Quang, Director of VNDIRECT Asset Management Division, said that the current context shows that there is a lot of room for the State Bank of Vietnam, to continue to reduce operating interest rates one more time.


According to Mr. Quang, VNDirect believes that the SBV may consider further reducing operating interest rates such as refinancing rates, and ceiling deposit interest rates for less than 6 months term by 50 basis points in the second half of 2023 and the probability is high right in the third quarter.


Previously, in March, the State Bank had 2 reductions in operating interest rates and according to VNDirect, this move marked a turning point in the reversal of domestic monetary policy. Due to the increased risk of a recession in the US economy, the market expects the US Federal Reserve (FED) to stop raising its operating interest rates after its next meeting in May and start cutting operating rates in the coming weeks. The second half of 2023. If this scenario happens, the pressure on the exchange rate and domestic interest rate will continue to cool down. From there, the SBV may consider reducing the operating interest rate further.


Recently, interest rates in the market have dropped markedly. Which, deposit rates of private banks extended their decline in April while interest rates of state-owned banks were flat. Specifically, the average 3-month term deposit interest rate and the average 12-month term deposit rate of the private banking group have decreased by 51 basis points and 19 basis points respectively since the beginning of April 2023. Since the beginning of 2023, commercial banks’ average 12-month deposit interest rate has decreased by nearly 50 basis points compared to the peak in January 2023.


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