'Reviving' shelved housing projects: Opportunity for investors

DNVN - After a difficult period, along with the recovery of the Vietnamese real estate market, a number of "abandoned" real estate projects have been restarted and re-implemented. The "revival" of these projects is not only an opportunity for investors to have a source to continue maintaining production and business activities, but also contributes to solving the "thirst" for housing for people.

According to the Vietnam Association of Realtors (VARS), some long-standing "shelved" real estate projects are showing signs of restarting and being introduced to the market. This result is thanks to the active support from State management agencies and the Prime Minister 's Special Working Group in efforts to resolve and remove legal difficulties and obstacles for businesses.

At the same time, this sign of restart is also thanks to additional capital from mergers and acquisitions (M&A) activities; investors' confidence in the positive recovery results of the market.

“Apartment projects in big cities like Hanoi and Ho Chi Minh City are in the context of apartment prices continuously setting new high levels. The “revival” of these projects is not only an opportunity for investors to have resources to continue maintaining production and business activities, but also contributes to solving the “thirst” for housing for people,” VARS affirmed.

Restarting "shelved" housing projects creates opportunities for investors, contributing to solving people's "thirst" for housing.

Projects with information about re-implementation in recent times include Astral City project (Thuan An city, Binh Duong), HaNoi Melody Residences project (Linh Dam, Hanoi), QMS Top Tower project (To Huu, Hanoi), The Summit Building (Tran Duy Hung, Hanoi), Ecity Tan Duc urban area (Duc Hoa, Long An )...

VARS believes that the restart of projects that were stalled in the past has been, is and will continue to be promoted thanks to the support from the Government and the private sector through project M&A activities. In particular, according to the provisions of new laws (Housing Law 2024, Land Law 2024, Real Estate Business Law 2023), if investors let the project "sit still" continuously for 48 months, they will face the risk of "losing everything", having the land reclaimed without compensation, which also makes investors more aware and urgent in their efforts to "restart the project".

Specifically, on the Government side, the State has made many policy adjustments and directed support to encourage businesses to continue implementing stalled real estate projects, including tax reductions and loosening lending regulations. Most recently, the improvement of the legal environment has been amended and supplemented in the direction of removing difficulties and obstacles for real estate projects.

The plan to implement previously abandoned real estate projects will also be promoted as the "thirst" for housing is constantly increasing along with economic development and urbanization. The restoration of stalled real estate projects is considered a key factor, helping real estate enterprises continue production and business activities.

However, VARS believes that to successfully "restart" projects is not a simple matter related to legal problems and financial pressure on businesses.

Accordingly, projects that are abandoned for a long time often face infrastructure degradation, causing huge recovery costs. Along with financial costs incurred during the suspension period, "eroding" all profits according to the original implementation plan.

This has led many investors to “revive” the project and then open it for sale with a new asking price that is up to double the previous opening price to make a profit. The high price while the quality is not upgraded, makes the project not accepted by the market and quickly “silences”.

Ha Anh

Source: https://doanhnghiepvn.vn/kinh-te/bat-dong-san/-hoi-sinh-nhung-du-an-nha-o-bi-dap-chieu-co-hoi-cho-cac-chu-dau-tu/20241022094631035