Creating a big "boost" for real estate: Need to develop social housing fund

Commenting on the real estate trend in the coming time, many experts believe that the big "boost" for this market will start from the beginning of the first quarter of 2024, because interest rates have been decreasing; the "absorption" of policies at that time will also be better.

However, to effectively solve the current problem of “both shortage and surplus” of housing, some economic and financial experts also suggest that the Government should establish a fund for loans to buy low-cost housing and a fund for developing social housing. This is a humane economic policy that not only helps develop the market economy but also has a great impact on social security.

More opportunities than challenges

Sharing at the Forum “First Autumn Real Estate: Forecasting the recovery time of the real estate market and investment recommendations” held on September 28, Dr. Can Van Luc, chief economist of BIDV, member of the National Financial and Monetary Policy Advisory Council, said that currently there are more opportunities than challenges because the real estate market has overcome the biggest challenge.

Second, the real estate market has been recovering, although compared to the "golden" period, the current market has only recovered about 20-30%.

Third, in the coming time, the real estate market will develop according to a better scenario. Accordingly, the big "boost" will start from the beginning of the first quarter of 2024, because interest rates have been decreasing; the "absorption" of policies at that time will also be better, especially with the level of transparency when 4 laws are passed by the National Assembly in the coming October.

In addition, according to Mr. Luc, violations of laws and regulations related to construction in 2023 will also be basically handled. Therefore, in the coming time, the economic and macroeconomic recovery situation of Vietnam and the world will also be clearer.

“With the above information, early 2024 will be a favorable time for investors to make decisions, because interest rates will decrease and real estate prices will be reasonably regulated,” Mr. Luc emphasized.

Sharing the same view, Associate Professor - Doctor Dinh Trong Thinh, financial economist (senior lecturer at the Academy of Finance) also commented that in the current period, the real estate market has some momentum to recover.

Firstly, with the drastic intervention of the Government, ministries, departments and branches have closely directed to solve the difficulties in the real estate market. Thanks to that, the problems in mechanisms, policies, administrative procedures and access to capital have been resolved.

Second, according to Mr. Thinh's assessment, the real estate market is continuing to restructure in segments, especially with high-end housing and resort tourism. Currently, investors are considering focusing resources on feasible projects to quickly bring them to market, promoting cash flow to return.

In addition, the Government recently approved the Project "Investing in the construction of at least 1 million social housing apartments for low-income earners and industrial park workers in the 2021-2030 period," thereby contributing to accelerating the process of market restructuring, innovating operations, and enhancing market capacity in the fastest way.

“The proof is that from the end of 2022 until now, we have had more than 400 social housing projects implemented. Therefore, the opportunity for market recovery is huge. However, the relatively clear change in the market will only occur at the end of the first quarter and the beginning of the second quarter of 2024 when more social housing is sold on the market,” Mr. Thinh emphasized.

Need to develop

From the above comments, financial economic expert Dinh Trong Thinh recommends that the Government should pay attention and direct local authorities to inspect and review local difficulties and closely coordinate with ministries, departments and branches to resolve them.

In addition, investors need to continue to promote the restructuring process and implement the registered social housing development and when facing difficulties, they need to proactively discuss and present to the management agency. Investors should consider and prepare resources when interest rates are low, and at the right time, they should participate in the market.

Meanwhile, Dr. Can Van Luc expressed his wish that the Government develop a social housing development fund; because this is a humane economic policy, both helping to develop the market economy and bringing great impact to social security.

Dr. Le Xuan Nghia, a member of the National Financial and Monetary Policy Advisory Council, said that the real estate market has two issues that need to be focused on. The first is the management issue, because according to him, currently there is no shortage of land, no shortage of money, and a large budget, so there cannot be a shortage of housing, and the market is sluggish.

“Second, I agree with the Prime Minister’s opinion that the real estate market crisis is a segment crisis. Currently, the segment that is lacking the most is low-cost housing, so we need to add more supply sources so that the market can develop based on real value. I think we should focus on this segment because this is the ‘Achilles heel’ for the real estate market to grow,” said Mr. Nghia.

In addition, Mr. Nghia also agreed with the view that there should be a housing loan fund or housing trust fund. He also raised the issue that if banks currently have “excess money”, they can issue government bonds for banks to buy, then establish a fund to lend for buying low-cost housing, lending directly to home buyers.

“In particular, low-cost real estate developers should not be financially disadvantaged compared to commercial real estate developers. For example, the regulation of only 15% profit, developers must determine who is the policy subject to buy, if wrong, they must bear criminal responsibility, which is unreasonable. Because of so many responsibilities, investors do not want to do it,” Mr. Nghia added.