Continuous “land fever”, real estate bubble will happen?
At the seminar “Creating momentum to recover the real estate market in the South” organized by Investor Magazine, Mr. Nguyen Manh Khoi – Deputy Director of the Department of Housing and Real Estate Market Management (Ministry of Construction) commented. : Real estate sector is being interested by all levels of government and investors because the real estate market is the puller and pusher for the economy.
According to research, the real estate market involves four 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, namely the Law on Housing and the Law on Real Estate Business, to remove issues related to real estate-related mechanisms and policies.
“We recognize that, through seminars, it will help ministries and sectors to have official sources of information to report to competent authorities to amend policies. Two years (2020-2021) can tell the real estate market severely affected by the epidemic when the number of projects decreased 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 the past two years, there have been almost no new licensed low-income housing and social housing projects – one of the segments with high demand, low supply and high demand,” said Khoi.
Mr. Nguyen Manh Khoi, Deputy Director of Housing and Real Estate Market Management Department (Ministry of Construction). Photo: Nhadautu.vn
Regarding tourism and resort projects nationwide, in 2021, it will also decrease by 35% compared to 2020, and in 2020 will also decrease by 50% compared to 2019. Real estate prices are opposite to supply. Real estate prices continued to increase during the pandemic, especially in the land plot segment in the past 2 years.
On average in the region and in a number of 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. This phenomenon needs to be carefully discussed 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 of Vietnam (SBV) as of November 30, the outstanding balance of bank credit 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 in 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%. An indicator 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 during the COVID-19 period poses many problems when the supply is decreasing, the demand is increasing, both domestically and abroad, house prices also increase. There are some bottlenecks, first of all, the policy mechanism, although the Government and National Assembly have issued policies and mechanisms to remove them, there are still bottlenecks such as: Lack of low-income housing supply, low supply and demand. high.
Second, real estate prices are constantly increasing, especially in urban areas. Many people ask questions earth fever But please confirm that, there is no real estate bubble, even though 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.
Currently, most localities have not done well with legal information about the project, causing many brokers to manipulate prices. However, it should be seen that a series of real estate policies designed for 2020-2021 have been delayed enough for implementation 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 amending many decrees and taking effect immediately, will remove investment and licensing. That is an opportunity for investors.
The Government’s support packages promise to have both direct and indirect impacts from Decree 43 of the National Assembly and Decree 11 of the Government. As regulated, the direct grant of VND 15,000 billion to tenants and purchasers of social housing in 2 years.
This will bring the opportunity to not worry about lack of buyers, only worry about lack of projects. Or the regulation of 2% interest rate support for investment units to build social housing, housing for workers in a package of 40,000 billion.
In addition to the ongoing programs, plus the new program will have a strong impact on the real estate market. The demand of the market, consumption, and large housing will lead to business and production development. Right now, there is a phenomenon that investors do not want to sell projects and wait for the price to rise before selling, which will be impulses to the market.
In the coming time, the Government will amend and complete 3 laws at the same time, namely the Law on Land, the Law on Housing and the Law on Real Estate Business. The Government and ministries are very determined to perfect legal regulations to promote market development in the coming time. Amended laws are on the table of the National Assembly, waiting for the National Assembly’s approval.
at Blogtuan.info – Source: Soha.vn – Read the original article here
