Starting this year, legal barriers hindering the recovery and development of the real estate market will be removed, and real estate businesses can get back on track, maintaining their performance, reputation, and trust with homebuyers.
Delays due to legal issues
Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), affirmed that the most significant obstacle in the real estate market is legal entanglements, accounting for 70% of the challenges faced by businesses during the investment preparation, construction, and trading processes. The primary cause is attributed to certain inconsistent and incompatible provisions in the law. This has indirectly led to a stagnant real estate market, causing a loss of trust among homebuyers and a cooling-off in property transactions in the past.
Legal hurdles are also the main reason many real estate projects have had to halt construction, affecting the rights and interests of homebuyers and the reputation of investors.
The Aqua City Dong Nai project is awaiting approval for adjustments to the master plan of Bien Hoa city to resolve major obstacles.
For instance, Novaland, despite receiving active support to resolve obstacles over the past two years, still faces multiple challenges in its real estate projects spanning Ho Chi Minh City, Dong Nai, Ba Ria-Vung Tau, and Binh Thuan. These issues remain unresolved.
Take the Aqua City Dong Nai project as an example. Although the local government has allowed the project to continue construction and sales for certain components, the developer is still awaiting the completion of procedures by the People’s Committee of Dong Nai province, the Department of Construction, and other relevant departments to appraise and approve adjustments to the master plan of Bien Hoa city to address the project’s primary obstacles.
In compliance, the project investor has also seriously abided by the administrative handling of construction order violations according to the law for certain structures that were not in compliance during the COVID-19 pandemic.
To rectify these violations and adhere to current regulations, the investor has improved the infrastructure, formulated plans, and organized the demolition of some temporary structures and those not in compliance with construction orders. These actions are aimed at expediting the completion of relevant legal procedures.
Similarly, the NovaWorld Phan Thiet Binh Thuan project is stalled at the stage of land price determination by the authorities. Despite multiple petitions and requests for guidance and resolution from the province of Binh Thuan, the land price determination process remains incomplete and unapproved, causing a delay in the project’s progress.
While awaiting solutions from the relevant agencies, many businesses have implemented measures to safeguard customers’ short-term interests or collaborated with banks to restructure loans for customers, offering flexible product switches and enhanced incentives…
Mr. Dennis Ng Teck Yow, CEO of Novaland Group, stated that although the Group has endeavored to provide supportive policies within its capacity, the key lies in expediting the resolution of challenges and promptly addressing legal issues to enable businesses to proceed with related procedures, restart projects, and complete them promptly to fulfill commitments to customers.
“These obstacles have also led to dissatisfaction among some customers, resulting in prolonged complaints and demonstrations, which is something no one desires,” said Mr. Dennis Ng Teck Yow.
Anticipation for three pivotal laws
Presently, while the real estate market has passed its most challenging phase, businesses require further support from authorities to overcome difficulties by removing legal barriers and fostering collaboration with stakeholders such as customers, contractors, and partners. This will allow the market sufficient time for absorption, and businesses will need time to recover following the restructuring phase and two challenging years.
The protracted legal issues in the real estate sector over the years are expected to be resolved in 2024 with the enactment of three pivotal laws closely related to real estate: the Land Law, the Real Estate Business Law, and the Housing Law.
Notably, the current Land Law has been submitted to the Government, requesting the National Assembly’s approval for early enforcement on July 1, 2024. The early effectiveness of the 2023 Housing Law and the 2023 Real Estate Business Law will contribute to enhancing the legal framework for the real estate sector, facilitating the resolution of lingering legal challenges in the market.
The enactment of three pivotal laws related to real estate is expected to invigorate the market.
Additionally, the monetary policy of the State Bank is yielding positive results. In the first four months of 2024, the real estate market witnessed historically low mortgage interest rates, encouraging homebuyers to enter the market.
This favorable condition has prompted several developers to introduce their projects, such as Gamuda Land commencing the construction of six towers ranging from 37 to 39 floors, offering nearly 2,000 apartments in An Phu ward, Thu Duc city. Nam Long’s Mizuki project in Binh Chanh district will also commence its next phase.
In Saigon East, Masterise Homes will break ground for a high-rise subdivision within The Global City urban area. Phu My Hung Development Corporation recently launched the Phu My Hung The Aurora project in Saigon South…
Novaland remains focused on project completion to facilitate staged handover to customers at Aqua City. NovaWorld Phan Thiet continues to deliver homes to residents while finalizing and operating a new chain of amenities. Since 2023, this project has attracted millions of domestic and international visitors, creating job opportunities for tens of thousands of local workers in various fields.
According to the Ministry of Construction, Hanoi and Ho Chi Minh City have resolved obstacles for 35-40% of real estate projects facing difficulties, while hundreds of projects in these two cities and other localities await solutions. Specifically, Hanoi tops the list with 246 projects, followed by Ho Chi Minh City with 143, Can Tho with 34, Binh Dinh with 16, and Hai Phong with 4. The Ministry of Construction has requested local authorities to expedite the resolution of these issues and report to the Prime Minister’s task force before June 30.
