Week 35/2024 – Central Vietnam Real Estate News Summary

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   1. The Ministry Of Natural Resources And Environment Requires Adjustment Of The Land Price Framework.

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1. The Ministry of Natural Resources and Environment (MONRE) has just required provinces and centrally-run cities to adjust, revise and supplement the current land price framework.

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   The reason for this requirement is that some localities are currently abusing the land prices in the existing price framework (promulgated under the 2013 Land Law) as the starting prices for land use rights auctions. This has led to a huge gap between the starting price and the auction winning price, causing a situation of exploiting auctions for profiteering and disrupting the real estate market.

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   This issue mainly stems from the old regulations on the land price framework, causing the price framework to no longer accurately reflect the actual market reality. The fact that some localities have been slow to update land price fluctuations has also contributed to exacerbating the situation.

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   The 2024 Land Law has created conditions for localities to proactively adjust the land price framework to suit the actual situation, in order to ensure transparency and fairness in the process of land allocation and auctions. Since the beginning of August 2024, some auctions in areas such as Hoai Duc and Thanh Oai have attracted a very large number of participants, with thousands of registration dossiers.

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   MONRE requires localities to urgently review and adjust the land price framework to accurately reflect the actual market situation, in order to avoid the situation of abusing auctions for profiteering. This is to ensure transparency, fairness and avoid disrupting the real estate market, affecting socio-economic development.

   In general, the adjustment of the land price framework will have a positive impact, contributing to the stabilization and healthy development of the real estate market in the time to come.

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Source: cafef.vn

2. The Return Of Affordable Real Estate.

In 2023, the real estate market in Vietnam faced numerous challenges, but a “genuine cleansing” of the market could create more optimistic prospects for the future. Notably, the affordable housing segment is making a comeback, driven by new policies from the Ministry of Construction and a national housing strategy that focuses on social housing and housing for low- to middle-income individuals. These developments aim to address the imbalance in the housing market.

Recently, affordable housing projects in Ho Chi Minh City and surrounding areas have seen strong demand, with new developments priced within reach of average buyers. For example, projects like Akari City and Flora Panorama in Ho Chi Minh City have attracted significant interest. The return of such affordable options is viewed positively, as the market had previously been dominated by luxury properties.

Moreover, regions like Dong Nai, Binh Duong, and Long An have also seen the emergence of affordable housing projects, which have been well-received by buyers. The revival of this segment is expected to help alleviate the housing shortage in major urban areas.

However, despite the positive developments, the market still faces significant challenges, particularly in terms of financing and interest rates. The future of the market depends on how well these issues are addressed. Ultimately, the shift towards more affordable housing and the presence of financially strong, reputable developers are seen as steps towards a more sustainable real estate market in Vietnam.

Source: cafef.vn

3. Promoting Vietnam-Korea Cooperation In SMEs: Opportunities For The Real Estate Sector.

On August 28, Vietnam’s Ministry of Planning and Investment and South Korea’s Ministry of SMEs and Startups held the first meeting of the Cooperation Committee on Small and Medium Enterprises (SMEs) and Startups. This meeting marks a significant step in enhancing cooperation between the two countries in this sector, opening up new opportunities for investment and sustainable development.

Minister Nguyễn Chí Dũng emphasized the crucial role of SMEs in the economy and expressed a desire for South Korea to continue investing in Vietnam, especially in areas such as the digital economy, green economy, and cultural-entertainment industries. Strengthening cooperation between the two countries not only promotes innovation but also positively impacts the real estate sector.

Specifically, as South Korean businesses expand their operations in Vietnam, the demand for commercial real estate, office spaces, and warehouses is expected to rise, creating favorable conditions for the development of industrial zones and new urban areas. Additionally, the increase in foreign investment will contribute to raising the value of real estate in regions where industrial and high-tech development is taking place.

The cooperation opportunities between Vietnam and South Korea in the field of SMEs and startups not only help drive economic growth but also bring significant benefits to the real estate sector, promising strong development in the future.

Source: baodautu.vn

4. Hanoi Has A Scarcity Of New Apartments Under 50 Million Per Square Meter.

Hanoi’s real estate market is experiencing a shortage of new apartments priced under 50 million VND per square meter as developers focus on high-end and luxury housing. The primary market currently offers few projects, most priced at 60 million VND per square meter or higher. The Ministry of Construction noted only two projects in Ha Dong and Hoai Duc districts offering lower prices, but these are for 50-year ownership, with long-term ownership costing significantly more.

Research from CBRE shows that the average selling price of new apartments in Hanoi reached approximately 60 million VND per square meter in the second quarter, a 6.5% year-on-year increase. The current market lacks new apartments priced under 50 million VND, with such options mainly found in the resale market. Following the real estate crisis, investors are focusing on high-liquidity properties like apartments, reflecting a shift in buyer preferences toward safer investments.

Source: vnexpress.net

5. The Ministry Of Construction Provides Feedback On The 44 Trillion VND ‘Mega-Project’ Làng Vân.

The Ministry of Construction has provided supplementary assessments for the adjustment of the investment policy for the Làng Vân Integrated Resort and Entertainment Complex project. Initially approved in 2016 by the Da Nang People’s Committee, the project spans 1,565 hectares and was initially valued at approximately 3,000 billion VND. The estimated total investment has now risen to over 43.922 trillion VND.

The Ministry’s recent feedback, documented in several official communications, highlights the need for compliance with legal regulations, particularly concerning the selection of investors, land use, and housing construction within the project. Despite being scheduled to commence in September 2022, the project has faced delays and has yet to begin construction.

Why it’s important: This feedback ensures that the project adheres to the latest legal requirements, particularly in areas such as investor selection, land use, and housing development.

Source: cafef.vn

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