Week 23/2024 – 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”
1. New Document Requirements For Vietnamese Citizens Regarding Red And Pink Book Template Change From 2025.
- The Ministry of Natural Resources and Environment in Vietnam proposes a unified format for land use right certificates (Red Books) and housing ownership certificates (Pink Books) effective 01/01/2025. This change will require citizens to switch from using identity cards (CMND) to Citizen ID Cards (CCCD). From 2025, Red and Pink Books will no longer use CMND numbers.
- Clause 1, Article 5 of the draft Circular mandates using CCCD numbers for personal identification on these certificates, following the Citizenship ID Law. Existing CMNDs will be valid until 12/31/2024. Certificates with CMND numbers remain valid, and updating to CCCD is not mandatory but recommended for convenience in real estate transactions. Government agencies cannot require citizens to re-issue certificates solely to update CMND information.
Source: cafef.vn
2. Developing Da Nang’s Only Mainland District By 2025 To Have 9 Wards.
By 2025, Hoa Vang, the only inland district of Đà Nẵng, aims for an urbanization rate over 85%, with 80% of its communes becoming wards, creating Hoa Vang central urban area focused on green urban criteria. The development plan, discussed at a scientific workshop, includes forming 9 wards and maintaining 2 communes.
Hoa Vang, comprising over 57% of Da Nang’s area, has significant potential but faces ecological and biodiversity challenges. Proposals emphasize preserving biodiversity, harmonizing urban design with nature, and avoiding “tube house” subdivisions. Urban growth should balance ecological limits, with a focus on high-density living and traditional rural space conservation.
Source: tuoitre.vn
3. Real Estate M&A Is Forecast To Be Exciting In The Second Half Of The Year.
Mergers and acquisitions (M&A) in Vietnam’s real estate sector are expected to surge in the latter half of the year as businesses seek resources to restructure loans, according to MB Securities (MBS). Many real estate firms, struggling with weak financial health and rising project development costs, are likely to sell projects to financially capable investors to sustain operations.
MBS notes that decreased US interest rate fluctuations have made capital arrangements for M&A deals easier, though investors prefer projects with clear legal status. Dr. Su Ngoc Khuong of Savills Vietnam observes continued foreign interest in Vietnamese real estate, especially from investors experienced in housing projects abroad.
Domestic projects face legal challenges, prompting investors to favor cash-generating assets like resorts, shopping centers, and office buildings, which typically pay back capital over 10-12 years. Both foreign and domestic investors are preparing for M&A activities, with domestic businesses aiming to expand land funds as financial difficulties ease. Cushman & Wakefield’s Trang Bui predicts a competitive land fund expansion race in 2024.
Source: vnexpress.net
4. How Will Rising Interest Rates Impact The Real Estate Market?
A recent report by MBS Research highlights that several macroeconomic factors are helping the real estate market recover in 2024. Here are some key points:
Attractive Interest Rates: The State Bank of Vietnam has lowered policy interest rates four times since the start of 2023, bringing medium- and long-term lending rates down to around 7.5%-7.9%. This reduction is encouraging investment in real estate.
Improved Legal Framework: The Housing Law 2023 and the Real Estate Business Law 2023 are expected to take effect on August 1, 2024. These laws aim to boost supply and strengthen investor confidence, though they might cause short-term supply shortages and require developers to have better financial health.
Support for Remittance Investment: The new laws recognize the rights of overseas Vietnamese to own property, which helps resolve previous issues of disputes and claims.
Increased Land Tax Revenues: The growth in land tax revenues signals a recovery in real estate supply.
Despite these positive developments, the market still faces some challenges:
Resort Real Estate Market: This segment is still slow, with low liquidity and legal hurdles, leading to very low absorption rates.
Bond Pressure: The value of maturing real estate bonds in 2024 remains high, although it has decreased slightly due to buybacks.
Difficulty Accessing Bank Loans: With rising bad debt ratios, banks are more cautious about lending, making it hard for real estate businesses to secure loans.
Overall, companies with clean land reserves and strong finances are likely to thrive, while others may continue to face difficulties.
Source: cafef.vn
5. The Nobu Danang Project Introduction Ceremony Attracted Nearly 400 Business Experts.
On June 6, 2024, nearly 400 business professionals across the country gathered in Da Nang City to attend the Nobu Danang project introduction ceremony of Boutique Real Estate Developer – Ban Viet Real Estate Company ( VCRE) organization.
The Nobu Danang Project Introduction Ceremony attracted nearly 400 consultants from 10 participating partners: Smartland, IQI, Era Vietnam, Vhomes, Dong Tay, CBRE, Arcadia, Savills, Indochina, CVR.
According to comments from the attending representative: “The Nobu Danang project is the first Nobu luxury apartment project in Southeast Asia, with standard investment from location as well as modern, luxurious design but Very sophisticated, I am sure the project will be successful, becoming a new symbolic building of Da Nang City and a place that attracts a large number of domestic and foreign customers.”
Nobu Danang is a project including the famous Nobu Hotel and Restaurant. Located at the intersection of Vo Nguyen Giap and Vo Van Kiet, with frontage facing My Khe beach, Nobu Danang is the first Nobu branded apartment in Southeast Asia, managed and operated by Nobu Hospitality.
Source: 24h.com.vn
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