"Not worrying about real estate bubble, the market appears a new investment trend."

"The remaining months of 2019 are not worrying about real estate bubble, the market will develop more firmly, more sustainably and appear new investment trends...", which is one of the judgments of Mr. Nguyen Manh Khoi, Deputy Director of Housing and Real Estate Market Management Department (Ministry of Construction).

Information at the "Overview of Vietnam's real estate and financial market forum 2019" on May 4 morning, said Nguyen Manh Khoi, Deputy Director of the Housing and Real Estate Market Management Department (Ministry of Construction), in 2019, there were many developments in real estate (real estate) in many types, however, the State Bank's report showed that the outstanding loans for industrial real estate projects and export processing zones projects Vacation calendar, loan for land use rights at the end of 2018 decreased compared to the beginning of the year.

Specifically, outstanding loans for industrial parks and resorts decreased by 22%; but the loan balance for buying land use rights decreased by 28%. Meanwhile, outstanding loans for other types of real estate such as housing, rental buildings... increased by 10%; Especially, outstanding loans for urban construction increased by 24% compared to early 2018.

The state management agency said that the remaining months of 2019 are not worrying about real estate bubble, the market will develop more firmly, more sustainably and appear new investment trends…

Regarding the transaction, Mr. Khoi assessed that in the beginning of 2019 and 2018 there was a decrease compared to 2017. Specifically, in Hanoi market, in quarter 1/2019, there were 14 new projects eligible to sell, with more than 5,000 apartment; compared to 2018, accounting for about 20%; low-rise houses are equivalent to 14% over the same period in 2018. While in Ho Chi Minh City, in quarter 1/2019, more than 3,300 apartments were certified as qualified to sell, equivalent to 12% compared to the same period of 2018; also low-rise houses equivalent to 20%.

"Thus, the transaction volume and supply of 2019 decreased more than 2018. This is due to the review of legal procedures over the past time, reviewing projects in the process of making investment procedures... so the volume of transactions has not increased" said Mr. Khoi.

What will the real estate market be like in the remaining months of 2019 when the State changes many policies that may affect the real estate market?

According to the Deputy Director of the Housing and Real Estate Market Management Department, the Prime Minister recently signed two directives and Directive 09 to ensure the growth target for the remaining 9 months of 2019 and Directive 11 on a number of solutions to promote the real estate market. The Prime Minister assigned many ministries to deploy; In which, there are some amendments, such as the amended Investment Law and the amended Enterprise Law, the Prime Minister assigned the Ministry of Planning and Investment to submit to the National Assembly in May in addition. Construction will also be submitted by the Ministry of Construction in July.

"The Prime Minister also assigned the Ministry of Construction to study and amend the Housing Law. Accordingly, the revision trend is to expand the form of social housing investment..." Mr. Khoi gave more information.

Also according to Mr. Khoi, the revision of some policies under the authority of the Government such as the amendment of Decree 15 on public-private cooperation, and by the end of 2018, there were 60 resolutions on suspending public-private cooperation projects. In general, only those projects that have signed contracts before December 31, 2018 have been implemented and have many impacts on the real estate market.

Because, the real estate projects related to BT are also stopped, including new projects, social housing projects, renovating old apartment... Therefore, Mr. Khoi said that the upcoming BT will be more limited, will shift to auctioning land use rights rather than transferring land fund for the project, except for special projects. In addition, restricting short-term loans to switch to medium and long-term loans will also affect the real estate market.

According to Mr. Khoi, in 2019, the real estate market is not more outstanding than in 2018, it is just restructuring the real estate, clearly defining the types of real estate, without the story of Condotel, Officetel... like the beginning of 2018. At the same time, after the State reviews the legal mechanism, the supply will be more secure and safer, but in general it is nothing more outstanding than in 2018.

“There may be a tendency to invest in real estate tourism in provinces and localities with tourism potential. But the report of the State Bank shows that the loan balance in this segment decreases, where is the capital source? I suppose, there must be from M&A projects. However, because banks are tightening loans for real estate, it may be difficult for real estate enterprises in terms of initial capital, but this is also an opportunity for enterprises to restructure their products, investment sources and bodies. Redefining the investment strategy by the next time, the State will control more closely credit sources with real estate… this helps avoid bubble and investment in the trend” Mr. Khoi added.

Leaders of the Department of Housing Management said that recently, some areas have speculation and trading plots... but the state has more experience in regulating so the real demand for the next time will definitely increase. Therefore, it is necessary to invest in low cost housing.

“The Ministry of Construction is researching to develop low-cost housing for rent to get incentives for businesses. Social housing development is necessary but the supply is very low in the past year due to the lack of preferential loans, enterprises have not paid much attention... therefore, it is necessary to study other types of investment to have more products to market. Enterprises also need to research industrial property investment, especially when foreign investors invest in Vietnam” said Mr Khoi.

Given that, in 2019 is the year when the real estate market has many difficulties and advantages, this is also the 10-year cycle since the quiet real estate market in 2009, Mr. Nguyen Manh Ha, Chairman of Real Estate Association Vietnam estate said that with the experience gained in the effort to overcome difficulties in the period of 2008-2013 both from the state management agencies and from the enterprises, Vietnam real estate market will surely keep growing steadily.

According to Mr. Ha, real estate prices may increase slightly due to a shortage of supply in Hanoi and Ho Chi Minh City because the demand for residential properties is still high, especially in big cities and new administrative - economic areas. Influence of US-China trade war creates a wave of shifting production facilities to Vietnam to help the industrial property market increase strongly, accompanied by housing and service facilities for workers in industrial zones, which will have the opportunity to grow.

At the same time, more tightly controlled real estate credit will make the quality of real estate loans more quality and healthier, reduce bad debts and will stimulate other capital sources to invest in real estate such as private capital, remittances, foreign investment and real estate securities.

According to Minh Thu