Vietnam Real Estate Market is entering a pivotal phase in the second half of 2024. Experts predict a potential recovery, driven by upcoming legislative changes. These shifts could unlock opportunities for foreign investors. However, outcomes depend on timely policy implementation. This article explores key scenarios, backed by insights from industry leaders and recent market data.
Legislative Boost for Vietnam Real Estate Market
New laws promise to reshape the Vietnam Real Estate Market. The Land Law 2024, Housing Law 2023, and Real Estate Business Law 2023 could take effect as early as July 1, 2024. If approved by the National Assembly, these reforms address legal bottlenecks affecting projects nationwide.
For instance, in Ho Chi Minh City, around 148 real estate projects face delays due to legal issues. These account for 70% of challenges for developers. Early adoption could streamline approvals and boost supply. Moreover, pilot resolutions for commercial housing projects via land use agreements are under consideration.
Recent data supports optimism. In 2024, nearly 81,000 housing units were available for sale, marking a 40% year-on-year increase. This surge reflects improved transparency and reforms, benefiting international investors.
Expert Scenarios from HoREA Chairman
Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), outlines two main scenarios for the Vietnam Real Estate Market.
Scenario One: Accelerated Recovery with Early Laws
If the National Assembly allows early enforcement from July 1, 2024, the market could rebound swiftly. Supporting decrees and guidelines from the government would follow. This setup ensures legal consistency and resolves most project hurdles.
Consequently, developers gain confidence, leading to increased supply. Investors and homebuyers benefit from reduced delays. Overall, this could foster a safe, sustainable market. Recovery might start by late 2024, with positive effects spilling into 2025.
Scenario Two: Delayed Progress and Ongoing Challenges
Without early approval, recovery might lag by six months. Projects involving non-residential land transfers for commercial housing would stall. This affects about 15% of developments, exacerbating supply shortages.
As a result, high-end properties dominate, while affordable housing remains scarce. Prices may stay elevated, hindering accessibility. Chau warns this could undermine long-term market health. Enterprises must reflect on past practices to avoid repeats.
Insights from Additional Experts
PGS-TS Tran Kim Chung, former Deputy Director of the Central Institute for Economic Management, adds three scenarios. First, without major changes, the market grows slowly but steadily. Second, strong boosts—like policy incentives—could drive rapid expansion.
The third, undesired scenario involves potential downturns if external factors worsen. However, 2024 trends show resilience. Apartment supply in Hanoi and Ho Chi Minh City doubled in some segments, per CBRE Vietnam reports. Foreign direct investment in real estate hit US$25.4 billion in 2024, up 9.4%.
To navigate this, investors should monitor updates from the Ministry of Construction. Urbanization and middle-class growth fuel demand, projecting market value at USD 34.4 billion by 2033.
Challenges and Lessons for Stakeholders
Past crises, including bubbles and freezes, hurt developers and buyers. Many firms faced losses or bankruptcy. Yet, some responsibility lies with enterprises, brokers, and speculative investors.
Therefore, self-reflection is key. Better compliance, management, and capital use can prevent issues. Collaborative efforts will promote a balanced Vietnam Real Estate Market.
Investment Opportunities Ahead
For foreign investors, the Vietnam Real Estate Market offers promise. Focus on emerging areas like infrastructure-linked projects. With GDP growth over 7% in 2024, the sector aligns with economic momentum.
In summary, while risks remain, proactive policies could accelerate recovery. Stay informed to capitalize on trends.
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