{"id":49849,"date":"2024-07-17T23:56:04","date_gmt":"2024-07-17T15:56:04","guid":{"rendered":"https:\/\/beyond360property.com\/vn\/?p=49849"},"modified":"2024-07-17T23:57:42","modified_gmt":"2024-07-17T15:57:42","slug":"3-laws-related-to-real-estate-help-the-market-find-balance","status":"publish","type":"post","link":"https:\/\/beyond360property.com\/vn\/news\/3-laws-related-to-real-estate-help-the-market-find-balance\/","title":{"rendered":"3 LAWS RELATED TO REAL ESTATE HELP THE MARKET FIND BALANCE?"},"content":{"rendered":"\t\t
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The real estate market has been in a state of misalignment for many years, high-end housing is overwhelming.\u00a0<\/span>Experts expect 3 laws related to real estate to help affordable apartments and social housing return.<\/span><\/i><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Market supply and demand continue to be imbalanced<\/strong><\/span><\/p>

Mr. Le Hoang Chau – Chairman of the Ho Chi Minh City Real Estate Association (HoREA) – said that the fact that hundreds of commercial housing projects cannot be implemented or cannot carry out construction investment procedures leads to a serious shortage of product supply in the market.\u00a0House prices<\/a>\u00a0have increased continuously for many years, about 70% of the supply belongs to high-end housing, lacking affordable and affordable apartments.<\/span><\/p>

In the first quarter of this year, the Ho Chi Minh City market also had only one\u00a0social housing<\/a>\u00a0project (old project) completed, 7 other old projects are being implemented.\u00a0A representative of HoREA said that this year, the real estate market in this city continues to be out of balance between supply and demand, high-end housing overwhelms the supply, leading to a “phase shift”.\u00a0It is difficult for low- and middle-income people to access affordable housing and social housing.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Many research units also continue to record the situation of high-end and luxury housing dominating the supply of the apartment market in Ho Chi Minh City.\u00a0Cushman & Wakefield Vietnam statistics in the first half of the year Ho Chi Minh City had 1,200 new apartments, down 54% over the same period last year.\u00a0In which, the high-end and luxury segments accounted for the majority of the total supply, selling prices also increased by 8% over the same period last year.<\/span><\/p>

DKRA Group’s report shows that in the first half of the year, Ho Chi Minh City has about 85% of the supply in the high-end segment (from 70 million VND\/m2 or more), the rest is the mid-end segment.\u00a0The entire market consumes about 70% of the supply of high-end and luxury products.\u00a0This reveals that the high-end segment is overwhelming the supply of the whole market.<\/span><\/p>

Savills Vietnam also expressed concern that affordable housing is becoming depleted.\u00a0This unit said that apartments under 3 billion VND are increasingly limited in Ho Chi Minh City, mainly located over 10km from the center.\u00a0Affordability will be a big challenge for people when less than 5% of the supply in the next 3 years falls into this segment.<\/span><\/p>

In the context of the market being out of phase, the National Assembly recently passed 3 laws related to real estate at the same time, including the amended Land Law, the Law on Real Estate\u00a0Business<\/a>, and the Law on Housing.\u00a0Many relevant regulations in these laws are assessed to create conditions for affordable housing and social housing to increase again.<\/span><\/p>

The Law on Housing has adjusted and expanded policies to attract investment, in which regulations on planning for social housing land funds are under the responsibility of each locality.\u00a0The investor is entitled to a profit of 10% of the investment in the construction of social housing;\u00a0For 20% of the land for construction of commercial housing or commercial service works, the investor will have to pay land use levy but is allowed to do business freely and enjoy profits.<\/span><\/p>

Income conditions to buy and lease purchase social housing are also going in a more open direction, not only limited to those who do not pay personal income tax as at present.\u00a0In addition, the Law on Housing has also abolished the residence conditions for those who are allowed to buy or lease purchase social housing.<\/span><\/p>

New policies related to social housing are expected to have a positive impact on the supply of social housing.\u00a0Mr. Le Hoang Chau – Chairman of HoREA – expressed that although there is a policy delay, when obstacles are removed, supply increases, social housing is built, house prices return to a reasonable state…\u00a0then the market will automatically adjust sustainably.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Ho Chi Minh City has lacked affordable housing products and affordable apartments for many years (Illustration).<\/figcaption>\n\t\t\t\t\t\t\t\t\t\t<\/figure>\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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It is difficult for the market to balance supply<\/strong><\/p>

Under the impact of new laws, the market expects the supply of affordable housing and social housing to return.\u00a0Along with that, many people also put their hopes in the future that the real estate market will achieve a balanced state, no longer “out of phase”, leaning towards high-end and luxury housing.\u00a0However, it is not easy.<\/p>

Mr. Vo Hong Thang – Director of Consulting Services and Project Development, DKRA Group – said that at the same time, 3 laws related to real estate were passed, creating a legal corridor for a smoother market.\u00a0However, the time for these laws to come into life needs at least 6 months to 1-2 years, when Decrees and Circulars are issued.\u00a0Since then, the new market supply has improved.<\/p>

However, he said that the story of real estate prices is not easy to decrease, even continuing to increase.\u00a0Because, the real estate price structure is the addition of land costs, construction costs, financial costs, legal costs, profits and other costs.<\/p>

The costs are at a high level, many projects have been legally congested for 5-6 years, interest costs have also increased…\u00a0Not to mention, land use levy is a variable, a bottleneck for investors at this time, even many businesses have not been able to pay land use levy or determined that the payment is a loss.<\/p>

“Cost factors are all increasing, businesses that want to reduce prices cannot be reduced.\u00a0For the past 5 years, real estate in Ho Chi Minh City has no new apartments with a selling price of 35 million VND\/m2,” Mr. Thang said.\u00a0Therefore, he said that high-end and luxury housing will still dominate the market supply in the coming time.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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High-end and luxury apartmen`ts are forecast to dominate the market in the near future (Illustration).<\/figcaption>\n\t\t\t\t\t\t\t\t\t\t<\/figure>\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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The cost story is also an issue that Mr. Lucas Ignatius Loh Jen Yuh – General Director of Nam Long Investment Joint Stock Company – mentioned at a recent event of CBRE Vietnam.\u00a0The representative of Nam Long said that the new regulations on the amount of money received in advance from customers directly affect the cash flow of the investor and the calculation of land use levy will also make land use fees increase.\u00a0But these effects are short-term.<\/p>

In the long term, Mr. Lucas Ignatius Loh Jen Yuh expects the new laws related to real estate to help the market be better managed, more transparent, with more sustainable growth potential;\u00a0avoid the formation of a “bubble” development economy, especially for real estate.<\/p>

Mr. Huynh Tuan Kiet – Director of Housing Marketing Department of CBRE Vietnam – said that the new laws introduce many new provisions and change the mechanism for low-income people to access affordable housing.\u00a0But that is only a matter of corridors, in fact, it is necessary to have a land fund, the Government’s support policies and the investor’s determination to implement.\u00a0“It’s too early to talk about the supply balance of the market,” Mr. Kiet affirmed.<\/p>

According to him, the supply of Ho Chi Minh City has been unbalanced for many years, high-end and luxury products account for the majority of the market, products for high-income people.\u00a0Middle-income people have to buy old, long-lived apartments, but still have problems with financial resources.<\/p>

In order for middle-income people to have more access to housing, Mr. Kiet said that a radical solution is needed: The Government is the coordinating unit, creating a land fund at appropriate prices, and allocating the necessary capital for investors.<\/p>

In addition, affordable housing development policies also need to go hand in hand with the development of appropriate transport and social infrastructure so that housing reaches people and is useful for life.\u00a0On the long journey, in order for affordable housing and affordable housing to increase, Mr. Kiet said that many parties need to influence and implement.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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In order for affordable housing and social housing to increase supply, experts say many comprehensive solutions are needed (Illustration).<\/figcaption>\n\t\t\t\t\t\t\t\t\t\t<\/figure>\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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Mr. Dinh Minh Tuan – Director of the Southern Region of Batdongsan.com.vn – also admitted that the imbalance has been going on for many years, because there is a conflict of interest between market participants.\u00a0Investors cannot develop a project for 2-3 years and then adjust the price lower when the input costs are increasing.<\/p>

Regarding the land fund, land prices in areas of Ho Chi Minh City cannot be lower.\u00a0Later, when the new law came into effect, the annual updated land price list had even more impact on the input costs of investors’ projects.<\/p>

In terms of profit, investors participating in social housing, on average 3 years for 1 project, the normative profit margin is about 10%.\u00a0During the same period, if the investor builds high-end – super luxury housing, the rate can be up to 15-20%.\u00a0Thus, in terms of willpower, the investor will not want to do a segment with a lower profit margin.\u00a0Mr. Tuan said that without the adjustment of the State, there will certainly be no supply from project developers with social housing.<\/p>

In terms of selling prices, the current apartment prices have increased very quickly over the years.\u00a0It takes a young person about 14-15 years to buy an apartment in Ho Chi Minh City with an area of 50m2.\u00a0People with better incomes buy to save, so there will be a phenomenon of apartment supply falling into the hands of investors waiting for price increases.\u00a0Therefore, the market will continue to imbalance supply, when it is increasingly difficult for people who want to buy houses, prices are increasing;\u00a0and those who already have a house buy more houses to continue hoarding as assets for the future.<\/p>

The question is how to reduce the difference in the supply of high-end and luxury housing with affordable and affordable housing?\u00a0Mr. Tuan suggested that the Government should assign tasks to investors, for example, if they want to do commercial projects in the center of Ho Chi Minh City, they must do social housing projects in Binh Duong, Dong Nai or surrounding areas.\u00a0At the same time, the Government should also have a policy to support project development tax exemption, have a support mechanism to promote investors to participate more in the affordable housing segment.<\/p>

With a unit specializing in building social housing, he proposed that the Government create a reasonable land fund and financial support so that investors can do 2-3 projects at the same time.<\/p>

In parallel with creating housing supply, Mr. Tuan also said that it is necessary to have a population expansion policy so that demand is not only concentrated in the center but also can develop to the suburbs of Ho Chi Minh City.\u00a0To do that, transport infrastructure needs to be ensured;\u00a0need to relocate schools, health and social infrastructure…\u00a0out of the center to relieve pressure.\u00a0At that time, suburban localities such as Dong Nai, Long An, and Binh Duong were able to fulfill the mission of sharing the responsibility with Ho Chi Minh City in creating a supply of affordable housing and social housing.<\/p>

\u00a0<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

The real estate market has been in a state of misalignment for many years, high-end housing is overwhelming.\u00a0Experts expect 3 laws related to real estate to help affordable apartments and social housing return. Market supply and demand continue to be imbalanced Mr. Le Hoang Chau – Chairman of the Ho Chi Minh City Real Estate […]<\/p>\n","protected":false},"author":6,"featured_media":49850,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[404,478,479],"tags":[],"class_list":["post-49849","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latest-news","category-management","category-property"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/beyond360property.com\/vn\/wp-json\/wp\/v2\/posts\/49849","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/beyond360property.com\/vn\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/beyond360property.com\/vn\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/beyond360property.com\/vn\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/beyond360property.com\/vn\/wp-json\/wp\/v2\/comments?post=49849"}],"version-history":[{"count":4,"href":"https:\/\/beyond360property.com\/vn\/wp-json\/wp\/v2\/posts\/49849\/revisions"}],"predecessor-version":[{"id":49857,"href":"https:\/\/beyond360property.com\/vn\/wp-json\/wp\/v2\/posts\/49849\/revisions\/49857"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/beyond360property.com\/vn\/wp-json\/wp\/v2\/media\/49850"}],"wp:attachment":[{"href":"https:\/\/beyond360property.com\/vn\/wp-json\/wp\/v2\/media?parent=49849"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/beyond360property.com\/vn\/wp-json\/wp\/v2\/categories?post=49849"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/beyond360property.com\/vn\/wp-json\/wp\/v2\/tags?post=49849"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}