Mr. Hoang Hai – Director of the Department of Housing and Real Estate Market Management – Ministry of Construction speaks at the Forum.
At the Forum on “Sustainable Development of the Real Estate Market” on the morning of November 27, Mr. Hoang Hai – Director of the Department of Housing and Real Estate Market Management, Ministry of Construction, said that although the real estate market in 2024 faced many difficulties, towards the end of the year, it showed positive signs of recovery thanks to the stability of the economy and the supportive policies of the Government.
Especially with the Law on Housing 2023, the Law on Real Estate Business 2023, and the Land Law 2024 officially taking effect from August 1, 2024, five months earlier than previously planned, has contributed to completing the legal framework for the real estate market. Difficulties and obstacles for businesses and real estate projects are being vigorously directed to be resolved, thus stabilizing the market and improving the supply.
All segments of the real estate market, from residential, commercial to industrial properties, have shown positive growth signs with many new projects being launched.
However, Mr. Hai said that there were still localized price fluctuations in some segments and regions. This increase in prices occurred in some areas, some types, and some segments of the real estate market, which led to an overall price increase.
According to Mr. Hoang Hai, there are many reasons for the increase in housing real estate prices, including some basic and main reasons.
First, the increase in real estate prices is partly due to the recent fluctuations in land-related costs and the impact of the application of new calculation methods and land price tables. Especially in some localities and regions, there is a phenomenon of auctioning land use rights with winning bids many times higher than the starting price. Poor management and implementation of land use right auctions have led to the formation of groups of investors who participate in auctions and bid up land prices, only to later forfeit their deposits after winning the auction, with the aim of creating artificial price benchmarks in the area for profit.
Second, the phenomenon of “creating artificial prices” and “price manipulation” by speculators and individual real estate brokers, taking advantage of people’s lack of understanding and herd mentality to make profits. These are individuals who act as freelance brokers, without a real estate brokerage license, lacking in expertise and legal knowledge, unprofessional, and with poor business ethics, leading to a situation of price gouging, collusion, and price manipulation, causing harm to customers and reducing the transparency of the real estate market.
Third, the lack of real estate supply, especially housing, to meet the needs of the majority of the population, low-income and middle-income earners in urban areas, especially in Hanoi and Ho Chi Minh City. Real estate businesses face difficulties and obstacles in legal procedures, especially in land price determination, land use fee calculation, site clearance, and land allocation. Many businesses face challenges in accessing credit and capital from corporate bond issuance. Many projects that were under construction had to be temporarily halted or delayed during the past time.
Although the Land Law 2024, the Housing Law 2023, and the Real Estate Business Law 2023 have been promulgated and took effect, there are still some limitations as it takes time for new mechanisms, policies, and laws to be effectively implemented to promote the safe, healthy, and sustainable development of the real estate market.
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