The real estate market is like a pot of porridge that boils and then cools.

The real estate market is like a pot of porridge that boils and then cools.

Reports from real estate research companies all indicate that the real estate market in the first quarter of 2023 continues to experience a period of stagnation, when both supply and market liquidity are low.

This has led to many businesses declaring bankruptcy, even the "big guys" in the market are shaking violently.

real estate market like a place where people are looking at each other again image 1 — The real estate market is like a pot of porridge that boils and then cools. (Photo: XP)

According to the General Statistics Office, in the first quarter of 2023, about 51,400 businesses nationwide withdrew from the market, an increase of 14.5% compared to last year. On average, about 25,700 businesses went bankrupt each month.

In the real estate industry alone, in the first quarter of 2023, the number of real estate businesses completing dissolution procedures was 235, an increase of 19.9% over the same period. The number of businesses temporarily suspending business for a period of time was 1,660, an increase of 57%. Thus, a total of nearly 1,895 units in the real estate business sector withdrew from the market.

Speaking to reporters of the Journalist and Public Opinion Newspaper, Mr. Nguyen Chi Nghia, Deputy General Director of Dat Xanh Mien Bac Real Estate and Services Joint Stock Company, said: In the first quarter of 2023, real estate workers have never felt such loneliness.

Previously, the Vietnamese real estate market grew strongly, leading to the growth of real estate-related industries, especially the brokerage industry. However, from 2022 until now, the gloomy atmosphere has covered the entire market.

“When the storm comes, almost all market participants are hurt. And up to now, professional brokers who said they participated in the market for fun have disappeared,” said Mr. Nghia.

According to Mr. Nghia, it can be seen that the market is currently going through a “storm”, causing difficulties for many businesses. However, this should not be considered a generalization, there are still some businesses that have many solutions to overcome difficulties.

real estate market like a place to welcome the new year 2 — Mr. Nguyen Chi Nghia, Deputy General Director of Dat Xanh Mien Bac Real Estate and Services Joint Stock Company. (Photo: RT)

“The current market performance is like a pot of porridge that boils and then cools, so we should not generalize. While the market is boiling, we can still sell suitable products, sign deals with customers, and real transactions still exist and continue normally. This is also the time when real investors will have the right to choose from many products on the market, but they still choose the segment that brings real value,” said Mr. Nghia.

Support for market recovery

In the Annual Seminar “Assessing the prospects of Hanoi apartment market 2023 - 2025”, Dr. Can Van Luc, economic expert said: Recently, the National Assembly and the Government have made a series of positive moves to revive the market, including 4 very important decisions.

Firstly, Decree 08 removes corporate bonds, including those of real estate enterprises, from maturing and now enterprises have a legal basis to negotiate with bondholders.

Second, Resolution 33 is extremely comprehensive in removing difficulties and obstacles for the current market, including three groups of legal issues, capital sources and social housing.

Third is Project 338 on developing 1 million social housing apartments by 2030 - a solid legal basis for businesses and localities to develop social housing.

Finally, Decree No. 10 is the official legal basis for resort and tourism real estate. Now condotels and officetels have the basis to issue red books.

real estate market like a place where people are waiting to see the light 3 — Dr. Can Van Luc, economic expert. (Photo: RT)

“I highly appreciate that such decisions have never been made in a month. These are the main legal bottlenecks of the market. On that basis, localities such as Hanoi , Ho Chi Minh City, and Da Nang have also begun to review stuck projects to resolve them. In addition, recently, in November 2022, the Government established a working group to resolve difficulties and obstacles in projects across the country,” said Mr. Luc.

Another noteworthy point about the policy is that there has never been a great opportunity to simultaneously amend the laws related to the real estate market: Housing Law, Real Estate Business Law, Land Law and Credit Institution Law like now.

The second issue is capital: The Government has directed the unblocking of two basic capital markets, the bond market and bank credit. After Decree 08 was issued, in March alone, 24,000 billion VND of new bonds were issued - of which more than 80% were real estate enterprises, showing that the policy has been put into practice.

“I think the corporate bond channel is a better capital channel in the coming time. As for the bank credit channel, this year the State Bank still targets credit growth at 14-15%,” said Mr. Luc.

All of these factors, Dr. Can Van Luc expects, will support the market to recover and grow in the coming time.

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