Relevant laws are about to take effect, what will happen to the real estate market?

(TBTCO) – Starting from August 1, 2024, the Land Law, Housing Law, and Real Estate Business Law will take effect (5 months earlier than previously stipulated). Experts unanimously stated that when the laws take effect, the legality related to real estate will be cleared, creating a sense of relief for investors, thus stimulating the development of the real estate market.

It is predicted that by the end of 2024 there will be many positive signals to create real value for real estate in the future.

Removing legal bottlenecks

According to the Ho Chi Minh City Business Association (HUBA), in the first 6 months of 2024, the real estate industry has been severely depressed. The mid- and high-end real estate product line is performing at its weakest since 2019, with transaction volume and absorption rates continuously decreasing. Primary supply in 2023 decreased by 40% compared to the previous year, the lowest in the past 5 years and mainly came from high-priced inventory. Meanwhile, demand tends to shift to neighboring provinces such as Binh Duong, Long An, Tien Giang, etc., due to expensive selling prices in Ho Chi Minh City; at the same time, investors have become more cautious when making investment decisions.

According to the report on the implementation of the 2023 budget, the land use fee revenue of Ho Chi Minh City did not meet the estimate, reducing the revenue by about 2,000 billion VND. The reason is that the real estate market has not yet escaped the “quagmire”, the business activities of many enterprises are facing difficulties. The approval of bidding, auction and site clearance projects are still stuck. In addition, there is a situation of shirking responsibility, investment preparation is not proactive…

In the report on the situation in the second quarter of 2024, HUBA expressed great joy when the National Assembly passed 3 amended laws related to the real estate market, including: Land Law, Housing Law and Real Estate Business Law. These laws will come into effect from August 1, 2024.

HUBA believes that the implementation of these new laws is expected to remove bottlenecks in the legal mechanism for businesses and encourage more efficient use of land resources. Furthermore, land valuation according to market principles will eliminate the situation of two prices, creating a reasonable basis for implementing compensation, site clearance, financial obligations to the State, determining real estate prices, calculating costs, project investment efficiency, etc.

Thereby, HUBA also recommends that the Ho Chi Minh City government quickly implement the above 3 laws, creating conditions for the market to recover quickly, remove bottlenecks, release production capacity and create jobs for businesses; implement Resolution No. 98/2023/QH15, issue specific mechanisms, new and breakthrough policies to meet the development needs of people and businesses.

Specifically, the city needs to completely resolve unfinished projects that have met the conditions for investment and sale; projects that have completed more than 70% of the progress. In addition to helping investors quickly recover capital, handling unfinished projects also contributes to urban beautification, making the city more spacious and clean.

At the same time, Ho Chi Minh City needs to quickly plan and have policies to prioritize the construction of residential development projects, construction of worker housing areas, housing for low- and middle-income people, social housing… At the same time, restoring the validity of Decision 3680/2020/QD-UB on allowing the construction of temporary works on agricultural land in suburban districts is to meet the essential needs of the city’s agricultural sector.

The real estate market will break out in the near future

Commenting on the real estate market after the Land Law, Housing Law, and Real Estate Business Law take effect on August 1, 2024, Mr. Le Hoang Chau – Chairman of the Ho Chi Minh City Real Estate Association (HoREA), expects a big movement, because the uniformity of the regulations will remove legal difficulties, leading to an increase in supply…

According to Mr. Chau, we must implement solutions to bring housing prices down to a reasonable level, we cannot let them increase forever. To be able to shift to a green, ecological, healthy, environmentally friendly real estate market, integrating many utilities… there must be a synchronous and unified legal foundation.

Referring to the trend of cash flow into the real estate market when the 3 laws come into effect, as well as the real estate market trend in the last 6 months of 2024, Mr. Vo Hong Thang – Investment Director of DKRA Group, believes that the market will recover in the near future.

Mr. Thang affirmed that the reasons are, firstly, the stability of the Vietnamese economy. Secondly, the current lending interest rates of banks are very low, creating great conditions for businesses and people. Thirdly, the laws that are about to take effect, including the Land Law, the Real Estate Business Law and the Housing Law, will create a legal corridor to clear the deadlocks and obstacles of the real estate market in the recent past.

In particular, the last 6 months of 2024 and possibly until early 2025, the market is likely to have certain bright spots, however, it will take more time for the market to break through. The recovery of the housing segment in large cities will create liquidity and will be the driving factor of the market.

According to Mr. Nguyen Quoc Anh – Deputy General Director of Batdongsan.com.vn, signals showing a reversal point of the real estate market have begun to appear. However, the recovery is localized, only concentrated in some types and in some areas.

The consolidation phase of the real estate market in the current cycle will fall from the fourth quarter of 2024 to the beginning of the second quarter of 2025, with the growth of private houses and townhouses. The boom phase is forecast to take place from the second quarter of 2025 to the fourth quarter of 2025, corresponding to the rise of the land and villa segments.

In the stabilization phase, the market gradually stabilizes and records the appearance of many new types of real estate. When the market stabilizes, most types of real estate will recover.

Source: Thời báo Tài chính.