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Week 8/2023 – Central Vietnam Real Estate News Summary

  1. Week 8/2023 – 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”

    1. 1. What real estate segment did GPT Chat recommend in 2023?


    Chat GPT believes that there is no “best” real estate segment to invest in 2023, because it depends on many factors such as market demand, economic situation, development opportunities, location, etc.


    However, some real estate segments are often considered “safe” and have good growth rates including rental houses, townhouses, offices, and high-rise apartments. We need to thoroughly understand the real estate segments and be more specific to decide on the right investment,” said artificial intelligence.


    However, some real estate segments are often considered “safe” and have good growth rates including rental houses, townhouses, offices, and high-rise apartments. We need to thoroughly understand the real estate segments and be more specific to decide on the right investment,” said the artificial intelligence


    • 2. Government asks state banks to extend debt repayment for struggling real estate businesses


    The draft resolution was issued shortly after Prime Minister Pham Minh Chinh chaired a nationwide online conference on removing difficulties and promoting the safe, healthy, and sustainable development of the real estate market. out on February 17.


    The goal of the draft Resolution is to remove difficulties and obstacles, especially in terms of institutions, implementation organization, and capital sources for the real estate market, in which to remove obstacles in legal regulations and submission of documents. order, procedures, and organizing project implementation, especially related to investment, land, and construction. Focus on removing obstacles for ongoing projects to complete soon, creating supply for the market; remove difficulties in credit sources, bonds… to open capital flows and create liquidity for the market.


    In addition to completing legal provisions, the draft Resolution also sets out the task of completing, promulgating and effectively implementing the project “Investment in the construction of at least 1 million social housing apartments for low-income subjects, industrial park workers in the period of 2021-2030”


    Regarding credit capital, the Government requires flexible and synchronous management of monetary policy tools, and opening up credit capital flows for socio-economic development. Proposing to extend loan principal and interest for difficult real estate businesses (enterprises, real estate projects for consumption, production, industry, tourism, and resort); while creating favorable conditions for businesses, home buyers, and investors to access credit capital.


    The Government also requested to closely monitor the credit granting situation for the real estate sector and take timely solutions to ensure safe and effective credit growth. Accordingly, continue to grant credit to real estate projects with feasible loan plans, customers with financial potential, ability to repay debts in full and on time; give priority to considering lending to real estate projects serving consumption, good liquidity such as social housing, renovation of old apartments, offices for lease, industrial real estate. There are solutions to reduce lending interest rates and support the real estate market.


    The Government assigned the State Bank of Vietnam to consider directing and guiding the extension of loan principal and interest for difficult real estate enterprises (enterprises, real estate projects serving consumption, production, industry, tourism, etc.) resort), directing and guiding credit institutions to create conditions for businesses, home buyers and investors to access credit capital. Coordinate with the Ministry of Construction, the Ministry of Finance, and the Ministry of Planning and Investment to research export and organize the implementation of a credit package of about VND 110,000 billion to lend loans to social housing projects and housing for workers under the refinancing method.



    • 3. Is it Advisable for Buyers to Hold off Purchasing Real Estate as Resale Prices Continue to Decline?


    The selling price has fallen deeply but buyers are still waiting for further reductions. The “wait” mentality is still dominating the resale market. Although there is a need to buy, many customers still expect the price to decrease further and “catch the bottom” in the coming period.


    Looking at the trend of the market in the coming time, experts say that this is the time when investors have many options, easy to negotiate on price, and the advantage is in favor of real estate investors with cash. have a long-term vision. The real estate market in the first half of 2023 is still facing many difficulties, but at the end of the year, it will gradually recover. The positive signals from the financial market, the Government’s regulatory policy as well as the SBV’s agreement to launch two new credit packages for real estate is a positive moves, opening up capital flows for the market after a period of a hard time. 


    The above factors will help accelerate the recovery of investor confidence in 2023 and the market will see more bright spots towards the end. The psychology of waiting for the “bottom”, expecting real estate to decrease further will be easy to miss the opportunity when the market passes the bottom and starts to go up. 


  22. Therefore, if you find a suitable product, at a reasonable price, buyers should realize it to seize the opportunity to own a house at this time.


    2. 4. High-Performance Industrial Properties in the Limelight


    According to KB Securities Vietnam (KBSV), the industrial real estate segment will face bigger challenges in 2023.

    “Due to the cautious sentiment towards the outlook of the global economy, Vietnam’s foreign direct investment (FDI) disbursement is expected to remain at the same level as in 2022. However, Vietnam is still an attractive destination thanks to lower labor costs, land rent and investment costs compared to the region”, KBSV analyzed.


    The supply of ready-built factories and warehouses is forecast to increase by the end of 2023. New supply will put pressure on rents and occupancy rates, possibly causing rents to level off or even fall.



    Besides the above challenges, in 2023, industrial real estate still has many good prospects.

    “The wave of supply chain shifts away from China will continue. Factories of Foxconn, Luxshare and Lego have all moved to Vietnam recently,” the report of Bao Viet Securities stated. With the caution of new capital flows, FDI will prioritize the expansion of production of existing enterprises and through the merger and acquisition of small-scale enterprises.


    In addition, the Government of Vietnam is focusing on an infrastructure investment strategy. In the public investment plan for the period 2021-2025, infrastructure investment accounts for about 60% of the budget. Disbursement of public investment capital is an indirect driver for industrial parks due to increased attractiveness thanks to improved infrastructure and convenient logistics system.


    2. 5. Da Nang is about to auction 25 large plots of land


    The city will auction 25 large land lots and 190 land lots in 2023 to attract investment businesses and economic recovery.

    This year, the city approved the plan and in the second quarter decided to auction 6 large land plots and 60 residential land lots to be divided into lots. Besides, 11 large land plots and 65 residential land lots will be auctioned in the third quarter; 8 large land plots and 65 other residential land lots will be auctioned in the fourth quarter.


    In 2022, Da Nang’s socio-economic recovery is quite positive after three years of the heavy influence of Covid-19, with GRDP growth reaching more than 14%, ranking third in the country; total budget revenue reached more than 120% of the plan, tourism – a key economic sector reached a total of nearly 3.7 million visitors. The number of businesses returning to operation has increased by 28.5% and now the city has nearly 37,000 businesses with a capital of more than 240,000 billion VND.


    In 2023, Da Nang will put into use the Digital Map of projects calling for investment; completely solve problems, and deploy investment in a number of key and motivational projects such as Lang Van tourism and entertainment complex, Viettel Da Nang software, and hi-tech center.


    2. 6. Insights on the Real Estate Market in 2023 and Beyond

  34. There have been expectations about the recovery of the real estate market in the first half of 2023. However, the challenge for businesses is still very large. What they are looking forward to is our measures to lower interest rates for homebuyers.

    The similarity is the sudden decline in the economy. At the beginning of the year, the growth was very strong, then it declined, especially since credit and interest rates were the same as in 2011-2012. However, the difference this year is that the supply of 2022-2023 is very limited compared to 2011-2013, in which the supply of social housing segments for middle-income people, as well as the supply of luxury housing is also quite limited compared to 10 years ago.

    In 2023, what we look forward to the most is credit expansion. Next is the stabilization of the macroeconomy, interest rates are lowered. For real estate businesses and home buyers, a reasonable interest rate is less than 10%. Loan interest rates above 10% are very difficult for home buyers and businesses.



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