"Unscrupulous" investment group pushes up apartment prices abnormally?

The above comment was made by Mr. Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association at the seminar "New opportunities of the real estate market" organized by Dan Viet newspaper today, August 1.

According to Mr. Dinh, it is clear that there is a problem with supply. In recent years, the market has not had any new projects approved or granted investment licenses. The projects are mainly old projects and resale projects. Supply is both lacking and of poor quality; supply to the people and the poor is very little; product structure is not suitable. Even the demand for real estate investment is not met due to lack of supply.

Forecasting the price of apartments in Hanoi in the coming time, Mr. Dinh said that any area where a "bubble" has appeared recently will definitely deflate, and prices will be adjusted to their real value.

But the general trend is that apartment prices will not decrease due to the increase in market input factors, such as land prices and compensation for site clearance. Project licensing is also not as easy as before. Only qualified investors can carry out projects.

“When supply and demand gradually balance, apartment prices will be determined by supply and demand. Hopefully, in the coming time, many projects will be resolved, and there will be more and more diverse supply. From there, the gap between supply and demand will be reduced, reducing the pressure to increase prices in the market. In Hanoi, from now until the end of the year, many new apartment projects will appear, and there will be thousands more products,” said Mr. Dinh.

Mr. Vuong Duy Dung, Deputy Director of the Department of Housing and Real Estate Market Management (Ministry of Construction) assessed that 3 laws (Land Law, Real Estate Business Law and Housing Law) officially took effect from today, August 1, with many specific regulations to remove obstacles, helping to increase supply in the market.

“The overall impact of these three laws on the real estate market is huge, contributing to increasing supply. In addition, a more open social housing policy will increase housing supply, meeting the needs of low-income people. This will also affect housing prices and supply,” said Mr. Dung.

Unlocking billions of dollars from real estate projects

At the seminar, Mr. Dinh cited statistics that there were over 3 billion USD from real estate projects that could not be implemented. This affected other related industries, such as materials, consumer goods, furniture, electronics, etc. Thereby, the "health" of hundreds of real estate businesses and other service businesses was negatively affected.

According to Mr. Dao Trung Chinh, Director of the Department of Planning and Land Resources Development (Ministry of Natural Resources and Environment), the early approval of the three laws will resolve a series of problems, including problems with land valuation and implementation of land financial obligations.

Mr. Chinh said that since the promulgation of the 2003 Land Law, there have been projects stuck for 20 years due to the inability to determine land prices. Many local officials are afraid of making mistakes and do not dare to do it. The 2024 Land Law, which has just come into effect, will solve these problems.

However, according to Mr. Chinh, we still have to wait for the implementation instructions and circulars of the ministries.

“To date, there have been 5 decrees issued on land reclamation, land valuation, resettlement compensation, and land investigation and assessment. These are general decrees guiding the implementation of the Land Law. The remaining 2 decrees on land use fee collection and land development decisions were drafted by the Ministry of Finance and have been submitted for signature,” the director informed.