Prof. Dang Hung Vo: "2-3 years from now the real estate market will lack large supply"


According to many analysts, the real estate market has now developed with more screening and stable towards sustainable development, with a variety of products that have a strong impact on the social and citizen life.


Recently, a series of laws have been issued to adjust and supplement related to activities of real estate investment and business, such as Housing Law, Real Estate Business Law, Construction Law, etc.


However, at present, the real estate market is still considered an early stage of development, showing many inadequacies and facing many difficulties; the type of development is still quite different, not meeting the set social goals; The planning is not yet consistent with the national socio-economic planning.


In a different perspective, Prof. Dang Hung Vo said that 2019 was the silence of the real estate market. Therefore, the supply of real estate, the number of projects launched in the end of 2018 early 2019 was almost zero, but the direct cause was the problem. Legal issues of land - was considered a legal crisis.


"Currently, there are many conflicts between the Housing Law and the Land Law, so Ho Chi Minh City will not dare to sign this document. I think that this is a market silence due to the legal crisis, while the success rate of projects is high", Prof. Vo said.


Mr. Vo also added that each type of land converted into residential land was handled in a way: public land was treated as public land, agricultural land was treated as agricultural land. "I'm worried that in 2-3 years the real estate market will be in short supply, so we have to calculate from now on. When there is a shortage of supply prices will increase, we have to consider the consequences of it", Prof. Vo predicted.


The expert emphasized that it is important that the legislation clearly protects the rights of the people (to what extent protection of agricultural land or Condotel products; how tax is adjusted in the future - affecting financial problems of investors).


Ms. Duong Thuy Dung, Senior Director, CBRE Vietnam, said that in the past, there were many products emerging to replace long-term real estate, for housing products sold, we have 3 product lines. Products: apartments, land-attached products such as villas, town houses.


Citing figures of recent market research report, Ms. Dung added that in the past time, the most marketed product was the apartment for sale, in 2008 alone, in two major markets, Ho Chi Minh City and Ha Noi. Internal supply was 15,000 units, number of units sold was 8,000 units, but by 2018, the supply was up to 63,000 units and the number of units sold was up to 55,000 units.


Ms. Dung also said that in the first 6 months of 2019, the number of projects offering decreased in comparison with the same period in 2018, if purchased for investment, we begin to have fewer options. Although the supply in the last months of 2019 has improved, the number of apartments launched to the market is still quite low compared to the same period in previous years. The forecast shows that Ho Chi Minh City is actively removing a series of difficulties for real estate businesses to soon deploy investment projects, but this has its lag, so the supply in the next 2 years is not as abundant as expected.


The scarcity of goods has pushed up house prices, raising the average market price to a new higher level than before. The average primary price of the whole market reached USD 2,009 per m2, up 21.6% year on year. Meanwhile, the high-end segment increased 52.9% year-on-year, at US $ 4,569 per square meter in the second quarter of 2019 thanks to the participation of a number of luxury projects in the CBD.


From the perspective of real estate businesses, Ms. Nguyen Thi Thanh Huong, General Director of Dai Phuc Land, said that the decline in supply was largely due to the influence from the mistakes of small businesses.


Because some investors only think about how to make money quickly, but forget about developing the value of a product, forgetting responsibility for customers. Since then, the market has gradually seen a lot of subdivision, rampant background sale, lack of legal completeness and failure to serve the needs of customers, and not creating sustainable sustainable value-added.


According to Tran Duc Vinh - General Director of Tran Anh Group, the decline in real estate supply is often due to the impact of many factors such as scarcity of land, businesses waiting for the new time to launch. However, 2019 is affected by the policy of tightening the legal framework for construction and licensing new projects. According to Mr. Vinh, to overcome this, it is necessary to have maximum cooperation from enterprises on state policies.


Mr. Le Hoang Chau - Chairman of Ho Chi Minh City Real Estate Association, said that each petition of Ho Chi Minh City People's Committee and Government Inspectorate considered and addressed properly and rationally for more than 100 projects that were "frozen" for review and inspect. Because the longer the inspection process, the more disadvantage for enterprises in terms of capital costs, increasing bank interest and loss of business opportunities. This has led to a reduction in the number of projects launched to the market, detrimental to home buyers on the choice of products like, the state budget revenue also decreased significantly.


Mr. Chau also suggested that the City People's Committee should direct the Department of Finance to soon develop the principles of criteria for evaluation of land prices for real estate business projects and commercial housing projects, ensuring the results of land use rational fee calculation and does not cause loss of state budget; Department of Finance and Department of Natural Resources and Environment complete the administrative procedures and procedures on the calculation of land use levy for commercial housing projects, in order to shorten the time compared to now, and increase the budget revenue of country. However, these recommendations have not been solved yet.


According to Nam Phong