Businesses sometimes have to ask for up to 38

(CLO) Mr. Nguyen Quoc Hiep, Chairman of the Vietnam Construction Contractors Association, revealed that in the real estate sector, businesses sometimes have to apply for as many as 38-40 seals in order to carry out a project.

The real estate market has witnessed many important milestones.

At the 5th Annual Spring Real Estate Forum held on the morning of February 19th, Associate Professor Dr. Tran Dinh Thien, Member of the Prime Minister's Economic Advisory Group and former Director of the Vietnam Institute of Economics, stated: 2024 concluded with impressive figures for the Vietnamese economy.

GDP grew by 7.09%, the size of the economy reached US$476.3 billion; inflation remained at 3.63%. Exports exceeded US$800 billion, the trade surplus reached US$25 billion. State budget revenue reached over VND 2 trillion. Foreign direct investment attracted reached over VND 38 billion.

Associate Professor Tran Dinh Thien, Member of the Prime Minister 's Economic Advisory Group, former Director of the Vietnam Institute of Economics. (Photo: ST)

Specifically in the real estate sector, 2024 witnessed several significant milestones compared to 2023, such as: a dramatic increase in apartment prices; and the government's strong efforts to implement three important laws – the Land Law, the Real Estate Business Law, and the Housing Law – sooner than expected. This is considered a decisive solution to address the biggest bottleneck in the economy at present.

In addition, the real estate market in 2024 witnessed noteworthy land auctions in Hanoi. Simultaneously, new land price frameworks in some areas were adjusted to closely approximate market prices, impacting businesses' input costs, product selling prices, and the financial obligations of individuals when engaging in real estate transactions.

Furthermore, increased investment in transportation infrastructure, especially expressways and high-speed rail, has opened up development opportunities for many regions, changed investment mindsets, and led to a shift of capital flows towards emerging markets.

Associate Professor Tran Dinh Thien believes that, despite positive economic growth and signs of recovery in the real estate market, businesses still face many challenges.

Specifically, in 2024, 233,400 businesses registered for new establishment or resumed operations, an increase of 7.1% compared to the previous year. However, the number of businesses withdrawing from the market also increased by 14.7%, reaching 197,900 businesses.

In January 2025 alone, the number of newly established and reactivated businesses reached 33,400, a 15% increase compared to the same period last year, while the number of businesses that ceased operations reached 58,300, an 8.1% increase.

"The number of businesses dissolving has increased significantly, while the number of new businesses is fluctuating. This is a worrying trend. This phenomenon has been occurring continuously since the Covid-19 period," Mr. Thien said.

Challenges we are facing

Forecasting the real estate market in 2025, Associate Professor Dr. Tran Dinh Thien believes that the market is at a point of recovery with many prospects accompanied by challenges.

"I believe that when faced with new opportunities, the potential risks for real estate businesses need to be carefully considered. Perhaps we still have much to discuss to help the real estate market gain momentum," he said.

Meanwhile, Dr. Can Van Luc, an economic expert, stated: Currently, the Vietnamese real estate market is showing positive signs of recovery. This is demonstrated by several factors.

Overview of the Forum. (Photo: RT)

Firstly, the GDP of the real estate business is projected to increase by 3.34% in 2024 compared to 2023, and the construction industry is also expected to see significant growth, with an increase of 7.78% in 2024.

Secondly, the supply of new commercial housing also increased during the 2021-2024 period. The tourism and resort real estate market still faces many challenges, but condotels have shown positive signs.

Regarding land plots, recent transaction volumes have been very positive and have recovered much better than in 2021.

The number of industrial parks nationwide has increased from 397 in 2021 to 431. Of these, 71%, or 301, are operational. The occupancy rate of industrial parks is also trending upwards.

However, Dr. Can Van Luc revealed some challenges facing the real estate market, including a 1.5% decrease in profits for listed companies and a 1.9% drop in stock prices, mainly due to a sharp 3.2% increase in costs.

Notably, the real estate market still faces challenges. Most notably, the current high housing prices stem from a variety of factors.

In addition, calculating land use fees is problematic in many localities and projects. Some localities have not yet published the new land price list; when they do publish it, the communication efforts have not been effective, leading to mixed reactions; and the issuance of guiding documents for new laws and resolutions is still slow.

There are still obstacles in land clearance, especially regarding the need for investors to negotiate directly with residents for small and medium-sized projects. Land use fee auctions still have shortcomings (starting price, capacity of participating parties, penalties, etc.). The methods of developing social housing also have inadequacies, and funding for social housing still needs attention.

Agreeing with this assessment, Mr. Nguyen Quoc Hiep, Chairman of the Vietnam Construction Contractors Association, said: The Party and Government are also making great efforts and showing determination in institutional reform, especially in the real estate sector. However, many businesses still face certain obstacles.

Mr. Nguyen Quoc Hiep, Chairman of the Vietnam Construction Contractors Association. (Photo: ST)

Mr. Hiep revealed that in the real estate sector, businesses sometimes have to obtain as many as 38-40 official seals to be able to carry out a project. Similarly, obtaining permits for planning adjustments also presents many difficulties.

As of January 2025, approximately 25 provinces and cities have announced new land price lists. Mr. Hiep believes that the underlying issue in land price calculation is due to the land price calculation structure and incomplete input factors, leading to high land prices. This is the biggest difficulty for businesses, causing many problems.

Firstly, there are delays in launching new projects. Currently, many businesses are still unable to determine land prices after 1-2 years. Secondly, input costs have increased significantly, meaning that inaccurate land valuation could lead to numerous problems.

"This is something I hope the ministries and local authorities will resolve for businesses. If this is resolved, the implementation of real estate projects will be faster," Mr. Hiep said.

Source: https://www.congluan.vn/doanh-nghiep-co-khi-phai-xin-den-38--40-con-dau-de-thuc-hien-du-an-post335149.html