Not only lack of supply, businesses ‘reveal’ the reason why house prices only increase, it is difficult to decrease

Statistics from the Ministry of Construction show that, in the first three months of this year, only 22 commercial housing projects were completed in the North, Central and South regions with 5,217 apartments. The number of these projects is about 47% compared to the last quarter of 2021 and about 54% compared to the same period last year. In which, the North has 13 projects, the Central region has 5 projects and the South has only 4 projects.

Not only lack of supply, hundreds of things are added to the price, which is the reason why house prices only increase, it is difficult to decrease… (Photo: Minh Thu)

The whole country has 1,216 projects under construction, equal to about 116% compared to the fourth quarter of 2021 and equal to 88% of the same period last year. In which, the South has 689 projects with 70,411 apartments, the North 288 projects with nearly 160,000 apartments and the Central region 239 projects with 104,860 apartments.

Notably, in the first 3 months of this year, there were a total of 39 newly licensed real estate projects with more than 18,600 apartments, of which the North had 21 projects with 6,103 units, the Central 7 projects with 3,077 apartments. and the South 11 projects with 9,480 units.

These figures show that the supply of commercial housing in the first quarter of the year has not improved, especially as the number of newly licensed projects is only about 41%, of which the number of apartments in other projects has not been improved. equal to about 49% over the same period in 2021.

Low supply is one of the reasons why house prices have increased but not decreased. Besides, there are a number of other reasons why all are added to the house price.

Mr. Ngo Quang Phuc, General Director of Phu Dong Group shared, when developing real estate, there are 3 factors: land, legal and financial capacity.

However, with commercial housing, the problem of land fund is extremely difficult. Along with that, the legal issues when implementing the project involve many stages and every stage is important and cannot be ignored.

The legal regulations on legal creation for a real estate project are currently very complete, only a matter of time is very long.

“For example, when we implemented a project in Binh Duong, the government supported it because everyone did it right; However, it took us 2.5 years to complete the legal procedures.

Not ‘running’ but ‘racing’. It is not simply that I go to this Department to make an official letter and that Department approves it for me, but if I want that Department to approve, I have to consult the relevant departments and the waiting time for that procedure must be according to regulations. However, the ISO regulation is 30 days to resolve but never so, even 3-4 times longer. The time it takes to complete legal procedures is very long and affects the financial costs of the business a lot.

For example, we buy a plot of land for 300 billion dong, every year we have to pay interest expenses of 10% for 300 billion dong, which means we lose 30 billion dong a year, two years lose 60 billion dong… Amount That will have to be added to the house price, there is no other way,” said Mr. Phuc.

Along with that, Mr. Phuc also said that the increased cost of raw materials must also be added to the price, which is why real estate prices did not decrease.

So, how to increase the supply to the market? Mr. Phuc said, it’s not that businesses don’t want to increase supply, but because they face too many difficulties. Businesses need to solve land and legal issues.

Similarly, Mr. Nguyen Van Hau, General Director of Asian Holding Real Estate Joint Stock Company, also said that when the enterprise cooperates to develop a project in Binh Chanh district (Ho Chi Minh City), since the project was approved by Mr. For investment approval, it took up to 4 years for enterprises to get approval for planning tasks.

If each year loses 10% in interest expenses, then it takes 4 years for the business to pay that interest.

It is very difficult for businesses to access land in Ho Chi Minh City and other provinces, the only way is to accept to buy “clean” legal projects at a higher price and accept less profit.

The legal story is a timeless story. The speed of legal procedures is too slow, making the number of projects allowed to open for sale in Ho Chi Minh City in recent years only about a few dozen projects per year, even in 2020-2021 there are only 7-8 projects; while in the past there were hundreds of projects.

Mr. Hau wants, how can businesses have more access to the land fund while the business finances can be arranged by themselves.

ID