Stable development of real estate market

Not only playing an important role in maintaining macroeconomic stability, the real estate market also contributes to controlling inflation, ensuring major balances, and promoting economic growth.

A corner of Hanoi city. Photo: Thuy Nguyen

However, besides the positive results, in recent times the "hot" development of this field real estate has revealed many limitations and potential risks, such as: the "supply-demand imbalance" of real estate, especially housing prices are still high compared to people's income; land use management in localities still has shortcomings; some localities have the phenomenon of plot division, subdivision, and uncontrolled sale of land...

Along with that, the real estate market's activities still lack publicity and transparency due to the lack of information systems, poor control of the activities of real estate trading floors and brokerage activities, leading to "chaos" in prices and "virtual" real estate transaction prices.

More than a year ago, the land auction in Hoai Duc district, about 25km from the center of Hanoi, was announced for auction 3 times with a starting price of more than 60 million VND, but no investors participated, so the auction could not be successful. This gloomy land auction situation also occurred in many suburban districts at that time.

But now, the same land plot, more than an hour's drive from the city center, has been auctioned for more than 100 million VND, the highest being more than 133 million VND per square meter. Also due to the land fever in the outlying districts that has been going on for many months, it has pushed the price of apartments and real estate in Hanoi to an unprecedented high.

In reality, the "fevers" of land and housing not only cause social consequences, but also greatly affect the socio-economic development in localities. Especially when the land price level is pushed up, when implementing projects, the compensation price for land acquisition will be many times higher, affecting the implementation of socio-economic projects.

This also gives rise to many land disputes, causing disorder and insecurity in society.

The reasons for the unstable and unhealthy performance of the real estate market include: the legal system related to investment, construction and real estate business still has some shortcomings; the implementation of investment and construction of real estate projects in most localities faces many difficulties, leading to a significant decrease in the supply of real estate and commercial housing compared to the previous period; real estate prices, especially housing and land prices, continuously increase and are too high compared to people's income.

Meanwhile, the control of investment capital flows into the real estate sector is not strict, still has potential risks, there is manipulation, lack of publicity and transparency related to the activities of real estate enterprises in the stock market; real estate corporate bonds are developing rapidly, lacking collateral, there is a phenomenon of issuing bonds, mobilizing capital but not using it for the right purpose...

It is forecasted that in the 2024-2025 period, bottlenecks in approving new residential projects will be resolved and the real estate market will recover when the 2024 Land Law is implemented on schedule.

To ensure the healthy development of the real estate market and make a more positive contribution to economic development, relevant ministries, departments and sectors need to coordinate synchronously in researching and perfecting the legal system related to the real estate sector, ensuring synchronization, creating a legal framework and conditions for the real estate market to develop stably, healthily and sustainably. It is necessary to closely monitor the situation and developments of the real estate market, inspect and review housing projects and real estate businesses to promptly remove obstacles in investment, land, planning and construction procedures.

Authorities need to continue to take measures to control and restructure real estate credit, ensure proper use, and avoid risks; review and amend regulations related to land use rights auctions and land price determination to ensure consistency and suitability with local realities; strengthen state management of planning, construction, real estate market and land management in localities, to take measures to manage and prevent illegal subdivision and sale of land plots and plots that are not in accordance with regulations and planning.

Along with that, it is necessary to improve the effectiveness of inspection, examination and review of the organization of land use rights auctions, project bidding, implementation of real estate projects and real estate business activities to promptly detect and strictly handle violations according to authority and regulations of law; direct to speed up the settlement of administrative procedures related to real estate projects; strengthen inspection and examination to promptly guide and handle cases causing difficulties and troubles in settling administrative procedures for people and businesses.

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