The National Assembly 's inspection agency assessed that the real estate market is still stuck in legal issues, land funds, and investment capital, despite many urging solutions from the Government and Prime Minister.
This comment was stated in the summary report of the questioning issues that was just sent to the delegates by the Secretary General of the National Assembly, Bui Van Cuong. According to the program, the National Assembly will question the implementation of resolutions from the beginning of the term in the field of construction on the afternoon of November 6.
Accordingly, the Government has taken many actions and issued many documents to remove difficulties for this market, such as telegrams and documents urging the Prime Minister to request ministries and localities to restructure the real estate market.
However, this market, including the housing market, is still facing difficulties and bottlenecks due to legal procedures, land funds and investment capital. Some administrative procedures on investment are cumbersome and cause obstacles, market segments are still skewed, and credit capital invested in this market still has many potential risks. Due to difficulties, real estate businesses have to stop investing and constructing projects, and this also causes difficulties for contractors, material suppliers and many other industries.
"Legal problems related to land, such as determining land prices, land use fees, site clearance, or regulations on selecting investors that overlap with regulations on investment, bidding, land, etc., are major barriers to the recovery and development of the housing market," the appraisal agency assessed.
Real estate in the center of Ho Chi Minh City, July 2023. Photo: Quynh Tran
In addition, housing prices are still quite high compared to people's income, according to the inspection agency. Many National Assembly deputies also expressed concern about the high housing price level when discussing the Land Law (amended) on November 3. Mr. Ha Sy Dong, Permanent Vice Chairman of Quang Tri Province, said that Vietnam is in the process of rapid urbanization, with the population moving to urban areas. If the housing supply is not expanded, it will not meet the demand and housing prices will be high.
"With such high housing prices compared to average income, people are forced to live in apartments below the safety threshold. In many cases, because they cannot afford the cost of buying a house, they have accepted to build houses on agricultural land," he said.
In a report released in May, Cushman & Wakefield Vietnam, a real estate consultancy, said that housing prices in Vietnam are currently about 20 times higher than the average annual income per capita. This makes it increasingly difficult for Vietnamese people to own a house.
Therefore, developing social housing is considered one of the solutions to restructure and balance the real estate market . A survey by the Ministry of Construction shows that the demand for social housing for low-income workers is about 2.4 million units by 2030.
By the end of June, the country had completed 41 social housing projects in urban areas, with a scale of about 19,516 units. Another 294 projects are under implementation, which will supply nearly 288,500 social housing units to the market in the coming time.
The VND120,000 billion credit package to support social housing, workers' housing and renovation of old apartments has had 37 projects wanting to borrow, with a capital demand of about VND17,850 billion. Over VND6,200 billion has been disbursed by the Policy Bank, lending to 15,000 individual customers to buy, rent-purchase social housing, workers' housing and family housing.
However, according to the inspection agency, the current development of social housing for workers has not met the needs of 1.8 million workers in need of housing. The central budget has not yet allocated enough preferential capital for policies on developing social housing and workers' housing. The capital source to subsidize interest rates for banks designated to lend for social housing has not yet been allocated.
Incentives for investors to renovate and rebuild apartment buildings also face many difficulties, leading to unattractiveness for investors to participate in apartment building renovation projects.
In addition, another problem that has prevented social housing from developing as expected, as pointed out by the National Assembly's inspection agency, is that localities do not allocate independent land funds for the construction of social housing, but only reserve land for the construction of this type of housing in commercial housing projects.
"Requiring all projects to reserve land for social housing without considering local housing development programs and plans or regional socio-economic conditions leads to a situation where this land fund is not invested, wasting land resources and increasing housing prices," the review agency concluded.
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