Vietnam real estate market remains optimistic

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Real estate business has been hit hard by the pandemic (Photo: Vietnamnet)

According to the latest quarterly report on the domestic housing and real estate market from the Ministry of Construction, real estate business and investment have both been hard hit by the pandemic.

The market posted 13,042 successful transactions for various types of property in the first three months of the year, ranging from apartments, houses, and land to condotels and resorts/villas, accounting for 14 percent of all existing units - the lowest in the past four years, reported by VNS.

The figure marked a decline of 60 percent against the same period last year, according to the report.

In order to help the market to be able to "overcome difficulties" in 2020, the Vietnam Real Estate Association has proposed that the Government support the removal of businesses focusing on credit and tax.

Accordingly, VNREA proposed that commercial banks should have a plan to reduce interest rates, consider the structure of debt repayment, postpone and reschedule periods and have a loan package with preferential interest rates to restore their operations, according to Financial Magazine.

Vietnam growth is still at the top of the region (Photo: Dan Tri)

VNREA also proposed to extend the submission time of obligations to the State budget for 6 months for each payment; exempt from late tax payment fines when enterprises have fully paid taxes; reschedule the payment of land rent after the epidemic is under control, reduce VAT and delay tax payment time...

Despite being affected by the disease situation, according to the Ministry of Planning and Investment, Vietnam's growth is still at the top of the region and the outlook is supported by other macro factors such as low inflation, record FDI growth, many signed trade agreements, and the US-China trade war...

In addition, Vietnam's efforts to control the disease have made a good impression in the eyes of foreign investors. In the long term, if Vietnam is successful in controlling the epidemic, Vietnam real estate also has the opportunity to catch the flow of tourists as well as large investment capital from other countries.

This shows that the domestic real estate market is still promising thanks to high GDP growth and the confidence of international investors. In this context, investors who are confident enough to control assets and financial resources will have a good opportunity to access abundant supplies and better prices.

The real estate market is still promising (Photo: Financial Magazine)

Moreover, Decree 25/2020 details the implementation of articles of the Bidding Law regarding investor selection. This new decree replaces Decree 30/2015. Specifically, the allocation of land to the winning investor will be implemented right after completing compensation and resettlement of the project land.

In projects that have completed bidding procedures for selecting investors, however, the State has not yet allocated or leased land but will now restart to minimize economic losses to society and investors. The new decree is expected to open up opportunities for businesses to recover, helping the real estate market become active again, according to Financial Magazine.

These optimistic signals partly help investors see the "dawn" of the real estate market in 2020 and many investors are ready to seize the opportunity to invest in real estate in the epidemic season.

Director of the Ministry’s Housing and Real Estate Market Management Department Nguyen Trong Ninh affirmed that the market has not become frozen but has actually developed quite stably.

Despite the COVID-19 pandemic, prices of resort real estate remained stable while slight increases were seen in the housing segment.

In Hanoi, the average apartment price rose 1.02 percent year-on-year in the first four months, while in HCM City it rose 3.5 percent.

Le Hoang Chau, President of the HCM City Real Estate Association, said the market is exhibiting good “resistance”. Demand for housing, he went on, remains high, so the market could recover rapidly after the coronavirus is defeated.

Su Ngoc Khuong, Senior Director of Savills Vietnam, pointed to several positive signs speeding up market recovery. The Government has recently issued a number of preferential policies dedicated to disease-affected enterprises, together with resolutions requiring the cutting of administrative procedures and the speeding up of investment disbursement, reported by VNS.

These will help boost the recovery of Vietnamese businesses, he said, including those operating in real estate.

Vietnam has also been confirmed as a safe and friendly destination for foreign investors, he added.

Stephen Wyatt, Country Head of JLL Vietnam, also said that positive economic growth, a stable political situation, and a transparent legal framework are great advantages for Vietnam market to recover in the upcoming time.

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