Real estate prices increased mainly due to low supply and high demand, legal procedures have not been removed

On the afternoon of April 15, in Ho Chi Minh City, Investor Magazine held a seminar with the topic “Creating momentum for the recovery of the southern real estate market”.

Looking at the overview of the real estate market in 2022 with new policies and thrusts, Mr. Nguyen Manh Khoi – Deputy Director of the Housing and Real Estate Market Management Department of the Ministry of Construction said that the real estate sector is growing rapidly. The real estate market is the driving force and driving force for the economy.

According to research, the real estate market involves 4 different industries and sectors in the economy, so real estate development will lead to other industries developing and vice versa.

The Government’s promotion of the economy will also make the real estate market develop. The Ministry of Construction and the Ministry of Natural Resources and Environment are being assigned by the Government to amend two laws, the Law on Housing and the Law on Real Estate Business, to remove problems related to real estate-related mechanisms and policies.

According to Mr. Khoi, in the past 2 years (2020 – 2021), the real estate market was heavily impacted by the Covid-19 epidemic when the number of projects dropped sharply. In 2021, the supply of apartments for sale and apartments will decrease by 34% compared to 2020, while in 2020 the number of new projects has decreased by 50% compared to 2019 by 50%.

In 2 years, almost no new low-income housing and social housing projects have been licensed – one of the segments with high demand, low supply and high demand.

As for the resort real estate segment, in 2021 this segment will decrease by 35% compared to 2020 and in 2020 will also decrease by 50% compared to 2019.

However, real estate prices have tended to increase during the Covid-19 pandemic, especially in the land plot segment in the past 2 years.

On average in the region and in some provinces, by the end of 2021, project prices will increase by 5-7%, individual house prices by 15-20%, land plots by 20-30%, and in some places by 50% in 20221.

Deputy Director of the Housing and Real Estate Market Management Department of the Ministry of Construction said that this phenomenon should be discussed carefully whether it is an objective or subjective cause, the cause of the price increase.

Regarding credit extension, according to the report of the State Bank (SBV) as of November 30, bank credit outstanding for the real estate sector is VND 690,000 billion – the credit balance is still safe (below 7%). ) for real estate business.

Issuance of corporate bonds (Corporate bonds) increased sharply, which is posing a problem after corporate bonds mobilized increased sharply while the supply was not available, there was 9 billion USD (3 times higher than 2020) poured into the market. Real estate, interest rate 8-13%/year; in which nearly 30% of corporate bonds issued do not have collateral.

FDI capital into real estate also increased in 2021, by December 2021 the total investment capital was more than 31 billion USD, up 9.2% compared to 2020, of which real estate accounted for 8.3%.

The index of interest is the inventory of real estate. In the aggregate of 2021, it is estimated that more than 2,200 apartments are in inventory, much less than in previous years (2020 is more than 9,000 units).

The real estate market in the years affected by the Covid-19 epidemic posed many problems when the supply decreased and the demand increased. Both at home and abroad, house prices have also increased.

There are a number of bottlenecks, firstly, the policy mechanism, although the Government and the National Assembly have issued policies and mechanisms to remove them, there are still bottlenecks such as the lack of low-income housing supply, the low-income housing supply, the low-income housing supply, and the low-income housing market. low demand high.

According to Mr. Khoi, real estate prices continue to increase, especially in areas with urban planning. Many people ask about land fever but there is no real estate bubble, although there is a fever, it is not a high fever.

Real estate prices increased mainly due to low supply and high demand. Part of it is that the legal procedures have not been removed, there are 3-4 year projects, this situation happened when there was no Covid-19, leading to a backlog of projects.

Financial sources are not diversified and sustainable, when bank credit is tight, stocks and bonds are controlled, this is being re-evaluated to see how long it will affect the market; The less the supply, the higher the price.

A representative of the Housing and Real Estate Market Management Department of the Ministry of Construction said that localities have not done well with legal information about the project, causing brokers to manipulate prices.

However, it should be noted that some real estate policies designed in 2020-2021 are late enough to be implemented in 2022; There are policies in early March of this year that local governments have just begun to implement.

In addition, many issues are being resolved in a number of decrees being implemented such as “issuing red books for Condotel will be clearly specified in the law”.

“The Ministry of Construction is being assigned to make a decree to amend many decrees and take effect immediately, which will remove investment and licensing. That is an opportunity for investors,” emphasized Mr. Khoi.