Real estate market challenges to continue until end of 2024: Experts
Speaking at a Forum late last week, Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association, said the market would continue to struggle with limited access to capital, legal bottlenecks, and companies’ inability to redeem bonds.
|A building near Ben Thanh Market in downtown HCM City whose construction stopped at the end of last year. The property market slump is expected to continue until the end of 2024. (Photo: VNA)|
A recent survey by his association found over 70 per cent of businesses saying Government policies aimed at resolving funding difficulties have not been effective. Real estate transactions have plummeted by 90 per cent in 2022-2023, indicating weak market demand, added Dinh.
Even after almost five months since its announcement, the Government’s 120 trillion VND credit package has remained untouched.
Dinh blamed this on many projects facing obstacles caused by local authorities lacking mechanisms and determination to resolve difficulties.
Hoang Hai, Director of the Department of Housing and Real Estate Market Management, said a number of housing projects are facing delays or suspension due to legal obstacles. This has led to a sharp decrease in supply and liquidity, further affecting the real estate market, he said.
Nguyen Quoc Hiep, Chairman of the Vietnam Construction Contractors Association, said 70 per cent of the obstacles stem from legal issues, particularly the overlapping of laws.
Economist Le Xuan Nghia said the weak domestic demand and slow recovery suggest a U-shaped rebound in the economy rather than a V-shaped one, leading to liquidity difficulties in many sectors.
To help the market recover and develop sustainably, experts recommended increasing the supply of affordable housing.
Vice Chairman of the Vietnam Real Estate Brokers Association Nguyen Van Dinh said the market has faced unprecedented problems in the past five years with a large inventory and a big drop in liquidity.
To address the imbalance between supply and demand, property developers should focus on affordable housing and social housing projects, he added.
Economist Le Xuan Nghia said it is vital to issue specific regulations to implement the 120 trillion VND support package for financing social and workers’ housing projects.
Businesses also need support to develop affordable housing and overcome factors that discourage them, he added.
Dr Tran Dinh Thien, a Prime Minister’s Economic Advisory Group member, said it is essential to restore the trust of investors, businesses, and consumers.
He also called for more Government support measures to revive the market.