Shortage of housing supply, reduced interest rates... have caused many people to return to investing in real estate. Since the beginning of the year, housing prices, especially apartments in localities, have increased rapidly compared to the previous period, in which projects and constructions with clear legal status, near central areas... are highly sought after.
Many experts recommend speeding up the process of perfecting institutions, shortening the time for investment procedures, and making project implementation stages public and transparent, thereby contributing to increasing supply, reducing intermediary costs, and creating conditions for reducing housing prices.
Real estate transaction prices increase "hotly"
Mr. Nguyen Vu Hai (Thanh Xuan, Hanoi ) is actively looking for a plot of land or two suitable apartments for about 12 billion VND, in which he plans to borrow about 3-4 billion VND from the bank, but for the past month he has not been able to find a suitable place. He had to search for a house through real estate brokers and wait. "The need is not for speculation or surfing, mainly if there is a suitable place, he will rent it out or build it for rent because sooner or later it will be a savings. The rent money will be used to pay the bank interest," Mr. Hai shared.
Currently, the real estate segment under 5 billion VND in Hanoi is almost "absent" from the market. Mr. Minh Tri, a real estate trader in Hanoi, said that real estate prices have skyrocketed in many segments recently. Buyers' demand is quite high, but there is not much suitable supply, leading to high prices. A few months ago, he sold an apartment in the Sunshine Riverside area, Tay Ho, after deducting all expenses, he made a profit of about 1.5 billion VND. Currently, he has bought a house in an alley in Lac Long Quan street, Tay Ho district and is also looking to sell. When posting online, he receives nearly 10 calls every day to see the house. Home buyers order real estate brokers to find a place to live, but recently it has been very difficult to find one. There is even a case where a house in the resettlement area of Vo Chi Cong Street was previously only about 30 million VND/ m2 , sluggish with no transactions, but recently has a price of more than 50 million VND/ m2 . "An apartment of about 70m2 When it was first posted online, it was priced at around VND3.5 billion and someone offered to buy it. However, after three days, the price had increased to VND3.8 billion and the homeowner refused to bargain," Mr. Tri added.
Similar to Hanoi, housing prices in Ho Chi Minh City have increased steadily every year regardless of whether the real estate market is sluggish or not. Statistics from a market research unit show that, over the past 10 years, the average apartment price in Ho Chi Minh City has increased by about 12% per year. Some mid-range projects in Thu Duc City, which were priced at only VND26 million/ m2 about four years ago, are now trading on the secondary market at no less than VND50 million/ m2 . Even projects in Thuan An City and Di An City ( Binh Duong Province) have reached the threshold of VND45 to 55 million/ m2 ; meanwhile, affordable apartments priced at VND2 billion or less (VND25-30 million/ m2 ) and social housing apartments have been in very short supply, almost non-existent in the Ho Chi Minh City market in the past three years.
Explaining the reason for this price increase, many experts said that there are also positive factors when market confidence shows signs of returning, but negative factors when house prices are increasingly out of reach for most people with average and low incomes. Another reason is that currently, interest rates of banks have decreased sharply, while other markets such as gold and stocks still have many unusual developments, so people have boldly invested in land and housing.
Find solutions to reduce housing prices
According to Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association, there are four factors that cause housing prices to continuously increase despite the sluggish real estate market, which are: Administrative procedures, land use fees, management costs and investor capacity, and unnamed costs.
With the current unknown land use fee, project investors find it difficult to determine the land tax to be paid, and thus cannot accurately plan the product price when sold. Only when the method of collecting land use fees is changed, converted to a tax levied on "the act of converting land use purposes from agricultural land, non-agricultural land to residential land", with a transparent tax rate (maybe equal to about 15-20% of the price in the land price list), will it be possible to eliminate the mechanism of asking for and giving, harassment, and reduce the payment of land use fees, contributing to reducing housing prices, thereby creating conditions to reduce housing prices; at the same time, reducing the time to carry out administrative procedures when building a housing project is also a way to reduce product prices. A housing project that takes up to 5 years to complete procedures will result in many costs being increased, so it is impossible to keep the original selling price, and in fact, the longer the procedures are, the higher the housing price will be.
In addition to land use fees, project procedure time, management costs and investor capacity also determine the cost of housing projects. If the investor has poor management capacity or lacks financial resources, it will lead to an increase in many types of costs such as: management, finance, sales, after-sales, thereby increasing real estate prices, and can even affect the quality of the project. In addition, the amount of unnamed costs, whether they increase or decrease, depends on the results of the State creating a business environment that is increasingly transparent, smooth and accountable, in accordance with international standards. At the same time, each enterprise must also respect the law, comply with the law, abide by the law and "dare to say no to negativity" in the process of project investment implementation.
Mr. Chau warned that the increase or decrease in housing prices depends on market conditions. However, if housing prices continue to increase rapidly, beyond the reach of people, especially those with average and low incomes, it will cause many negative consequences for the market.
Vice President of the Vietnam Real Estate Association Do Viet Chien analyzed that there are three groups of issues related to real estate development policies that are currently facing many difficulties, including: the group of law enforcement organizations, the group of overlaps between legal documents, and the group that has arisen but the law has not yet regulated. In addition, the current regulations on investment and construction procedures are still quite complicated and time-consuming (some projects take up to 5-7 years to complete), causing businesses to miss out on effective business opportunities. Therefore, state management agencies need to quickly issue public and transparent procedures on investment and construction so that people and businesses can grasp and be ready to participate in the market, thereby eliminating unnamed costs and the request-grant mechanism, contributing to reducing housing costs.
According to economist Nguyen Duy Minh, in order to develop the real estate market in a harmonious and sustainable manner, all relevant entities must uphold their responsibilities and join hands to remove difficulties for the market. The State needs to take more drastic measures to promote the market, focus on social security, and create opportunities for low-income people to buy houses; at the same time, real estate businesses need to restructure products, reduce investment costs, and reduce cost prices to create liquidity for the market, contributing part of their responsibility to the Government's housing programs, including the Project "Investing in the construction of at least 1 million social housing apartments for low-income people and industrial park workers in the period of 2021-2030".
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