These are important, fundamental laws that reshape the legal framework for the real estate market. Alongside this, the government has made continuous efforts to remove obstacles and support the real estate market. However, in addition to supportive policies, the real estate market also faces fluctuations in the macroeconomic and financial/monetary markets both domestically and internationally, creating a new context for real estate investment activities.
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| View of the seminar (Photo: HNV) |
These points were clarified at the seminar "Investment Focus: Real Estate in the New Context" organized by TheLEADER on the afternoon of July 30th in Hanoi .
Attracting a large number of experts, lawyers, and managers, the seminar provided an analysis of the impact of new legal regulations on real estate investment activities, discussed what businesses need to do to adapt to the new legal framework, and analyzed potential investment opportunities and strategic investment areas in the new context.
At the seminar, representatives from business associations, real estate investment and consulting firms, and real estate legal experts discussed the impact of the three amended laws on the real estate market and real estate businesses; legal obstacles that have been removed; remaining issues; whether the real estate market has begun a new cycle; real estate price trends; potential investment areas; the attractiveness of different real estate segments to investment capital; business strategies to adapt to new legal regulations, market changes, and customer preferences; credit flows into real estate and pressure on real estate bonds.
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Ms. Nguyen Hoai An, Senior Director of CBRE Vietnam, presented her views at the seminar (Photo: PV) |
Positive outlook for real estate
Speaking at the seminar, Ms. Nguyen Hoai An, Senior Director of CBRE Vietnam, affirmed that several drivers of Vietnam's economic growth in the recent period include the continued strong growth of FDI. In the first six months of 2024, Vietnam remained one of the leading countries in attracting FDI (both registered and disbursed) in the region. This capital contributed to overall economic growth and boosted real estate development, especially industrial real estate. According to Ms. An, another growth driver was the recovery of exports and imports in the first six months of 2024, reaching 14.5%, contributing significantly to the recovery of the country's GDP. This recovery in the trade balance was due to the recovery of global demand. In addition, the increase in the number of international tourists returning to Vietnam, after a long period affected by the COVID-19 pandemic, should also be mentioned. It is projected that the number of international tourists visiting Vietnam could reach 18-19 million. In addition, the number of domestic tourists has been and continues to be a positive driving force for the tourism industry in general and tourism-related real estate in particular. Furthermore, Vietnam also faces numerous challenges. For example, inflation could affect real estate prices, tighten consumer spending, and especially impact interest rates. Previously, interest rates were relatively moderate to low, which was a driving force behind economic and real estate market growth.
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Lawyer Pham Thanh Tuan, from the Hanoi Bar Association, presented his views at the seminar (Photo: PV) |
Sharing insights on seizing opportunities and overcoming challenges for real estate businesses in the context of new legal regulations coming into effect, Lawyer and Master of Law Pham Thanh Tuan, from the Hanoi Bar Association and a real estate legal expert, stated that the Housing Law 2023, the Real Estate Business Law 2023, and the Land Law 2024 will take effect from August 1, 2024. The new regulations of these three laws, effective simultaneously, will help resolve some obstacles and overlaps that have caused many difficulties for businesses operating in the real estate sector. Besides the new points that positively impact businesses, these three laws still have some issues that have not been addressed or need further research for improvement. These include: Businesses that win bids may have their contracts canceled if they are slow to disburse funds for compensation and resettlement support. "Businesses that are investors in land-use projects need to anticipate (newly arising) legal situations related to the legal consequences of delays in allocating funds for compensation and resettlement support, and thus prepare thoroughly in terms of financial resources to avoid the risk of bid cancellation," lawyer Pham Thanh Tuan recommended.
According to Lawyer Tuan, other shortcomings include: the lack of investor approval for urban and rural residential area projects; commercial housing projects approved under the investment policy form but without "residential land" are still "stuck"; the distinction between transferring a portion of a project and transferring land use rights with existing infrastructure within a real estate project to an organization; new regulations on land valuation remain a "risky unknown" for businesses; and the laws related to real estate, once in effect, will lead to changes in market structure and business scale.
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| Dr. Nguyen Van Dinh, Vice President of the Vietnam Real Estate Association (Photo: PV) |
Believing in the new legal framework's impact on the real estate market.
During a direct discussion at the seminar, Dr. Nguyen Van Dinh, Vice President of the Vietnam Real Estate Association, pointed out several new aspects of laws related to the real estate market. For example, land price lists, previously regulated once every five years and decided by the central government, are now updated annually, decentralizing authority to local levels. Information on land prices is now more rigorous and clear, ensuring a fairer and more equitable playing field. In addition, regulations on investment, social housing, and the sale of houses to foreigners are new provisions that will create a more interesting and attractive playing field in the future.
Meanwhile, Mr. Nguyen Hoang Nam, General Director of G-Home, said that with the significant loosening of legal restrictions, he hopes that the new circular will help remove all difficulties so that investors can confidently build social housing.
Highly valuing industrial real estate, Mr. Nguyen Quoc Khanh, Chairman of DTJ Group, noted that although the Vietnamese economy is affected by the general difficulties of the global economy, Vietnam's industrial production attraction is very good and is considered a "hot spot" for attracting foreign investment. In addition, infrastructure and seaports in Vietnam have improved significantly. Industrial real estate markets such as Hung Yen and Ha Nam have favorable transportation infrastructure, attracting many domestic and foreign investors. Furthermore, recent government policies have also provided much support for the industrial real estate sector, especially the new law allowing the transfer of industrial real estate, which has completed the legal framework. However, investors also face challenges besides the large capital requirements, long repayment periods, moderate profits, and slow liquidity. The government is aiming to develop green industries with a focus on green elements.
In his overall assessment of the real estate market, Mr. Le Hong Khang, Director of Analysis and Credit Rating at FiinRatings, believes that the market outlook for the next 1-2 years will remain one of slow recovery. Positive developments from legal frameworks or policies will take time to take effect.
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Mr. Tran Quang Trung, Business Development Director of One Housing (Photo: PV) |
Mr. Tran Quang Trung, Business Development Director of One Housing, predicts that the Hanoi market will continue in its current state until the end of the year, and the supply of apartment units will only improve after 2025. Other segments, such as low-rise buildings, will also experience a significant boost at the end of this year and the beginning of next year.
Source: https://dangcongsan.vn/kinh-te/bat-dong-san-trong-boi-canh-moi-673797.html
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