“The Rising Cost of Real Estate: Unraveling the Mystery”

Reduce processing time by 30%

On June 13, 2025, Mr. Tran Van Son, Minister and Head of the Government Office, signed Notification No. 294/TB-VPCP conveying the conclusion of the Government’s Standing Committee at the meeting on the real estate market situation.

Accordingly, on May 24, at the Government Headquarters, Prime Minister Pham Minh Chinh chaired the meeting of the Government’s Standing Committee, giving opinions on the real estate market situation. The meeting was attended by Permanent Deputy Prime Minister Nguyen Hoa Binh and Deputy Prime Ministers Tran Hong Ha, Le Thanh Long, Ho Duc Phoc, and Nguyen Chi Dung, along with leaders of ministries, sectors, and representatives of enterprises operating in the real estate and banking sectors.

After hearing the reports from the Ministry of Construction and the opinions of leaders and representatives of ministries, sectors, agencies, associations, enterprises, and banks at the meeting, the Government’s Standing Committee concluded that the real estate market has made important contributions to the economy, affecting production chains, capital and credit markets, and labor, especially regarding social security issues such as housing and social housing for the people.

According to the report by the Ministry of Construction, in the first months of 2025, the real estate market has witnessed positive changes, with both supply and real estate transactions increasing compared to the same period in 2024. However, the development of the real estate market is still not commensurate with its potential due to existing obstacles and issues that hinder its progress, such as an imbalanced product structure and a lack of housing that meets the needs of workers. In addition, speculation, manipulation, price gouging, and market monopolization still exist, and there is a lack of transparency in real estate transactions.

To promote the healthy development of the real estate market, in line with economic conditions and people’s income levels, the Government’s Standing Committee requests an urgent and thorough implementation of decentralization and delegation of authority as per Conclusion 115-KL/TW of the Politburo. It is necessary to immediately identify the reasons for the increase in real estate prices, including land prices, material prices, and interest rates, and promptly come up with solutions to reduce these factors, increase accessibility to real estate, and boost supply.

Focus on minimizing redundant and unnecessary administrative procedures, eliminating complex paperwork requirements, and ensuring a reduction of at least 30% in the time required for administrative procedures and 30% in compliance costs, in line with the Government’s Resolution 66/NQ-CP dated March 26, for the implementation of real estate projects. This includes considering the reduction of procedures related to investment approval, project appraisal, and design, especially construction permits, inspection of acceptance, reducing pre-checks, and strengthening post-checks.

The Government’s Standing Committee also requested a review and amendment of inconsistent and contradictory standards and norms that increase costs, such as planning, parking, and fire protection norms. Additionally, there is a need to develop support policies for genuine home buyers, increasing accessibility to housing and real estate for citizens, thus enabling them to realize their right to own a home.

Amend laws to align with reality

Regarding specific tasks, the Government’s Standing Committee requested the Ministry of Construction to closely coordinate with the Ministry of Agriculture and Environment to promptly research and review the Laws on Housing and Real Estate Business to identify existing shortcomings and inconsistencies and propose amendments to meet the expectations for the development of the real estate market. A Government report to the National Assembly during the break between the two sessions of the 9th National Assembly is expected to seek permission to issue a resolution adjusting the provisions of the Laws on Land, Real Estate Business, and Housing to align with reality and the needs of the real estate market.

The Ministry of Construction must comprehensively review decrees and circulars related to housing and real estate business to propose amendments through a streamlined process, resolutely cutting down on complicated administrative procedures that increase costs and removing provisions that are no longer practical.

At the same time, the Ministry of Construction should closely coordinate with the Ministry of Finance, the standing agency of the Steering Committee 751, to promptly address difficulties and obstacles in real estate projects, facilitating their early investment, completion, and operation.

Notably, the Ministry of Construction is assigned to coordinate with the Ministries of Finance, Agriculture and Environment, Public Security, and other relevant ministries and agencies to integrate investment procedures, master plan approval, technical design approval, fire protection, and other procedures into one procedure to shorten the time for construction investment. These integrated procedures will be compiled into a single decree, which will be reported to the Government.

There is an urgent need to research and develop a model for the “Center for Real Estate and Land Use Rights Transactions under State Management.” This center will handle real estate transactions and related procedures, such as public transactions, taxes, and land-use rights registration, in an electronic environment similar to the securities trading model, ensuring transparency in asset and transaction price disclosure for effective management and preventing tax leakage.

The Ministry of Construction must also coordinate with the Ministry of Agriculture and Environment and other relevant ministries and agencies to review legal regulations on vacation real estate, condotels, and foreign access to vacation real estate to propose flexible management solutions that meet the practical needs of the real estate market development and drive economic growth.

Similarly, the Ministry of Finance is assigned to research and propose the issuance of policies on taxing unused housing and real estate, as well as taxing the price difference between the calculated land use charge and the selling price of real estate products in projects. In coordination with the Ministry of Construction and other relevant ministries, the Ministry of Finance will also work on digital transformation to integrate procedures related to real estate transactions, notarization, taxes, and land-use rights registration in an electronic environment.

At the same time, the Ministry of Finance will direct commercial banks to focus on lending and disbursement for commercial housing projects with suitable prices, promoting credit growth, and contributing to the 8% growth target set for 2025. They will also work on reducing procedures and conditions to facilitate people’s and enterprises’ access to credit while ensuring strict control to prevent corruption and negative incidents. Additionally, they will research a credit package for young people with housing needs.