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Three levers to defrost real estate

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The push for public investment, legal clearance, and low-cost housing support promises to help the real estate market recover after the four-month freeze.

At the seminar “Real Estate in a New Trend: Flexibility to Adapt” published by the newspaper Laborer Recently, many experts said that although the fourth Covid-19 epidemic caused real estate transactions to freeze, supply plummeted, but when the blockade is lifted, the opportunity to defrost the market is still very large thanks to a series of leverages. policy and public investment.

Public investment push

Dr. Tran Du Lich, a member of the National Monetary Policy Advisory Council, said that he is proposing to Ho Chi Minh City on a medium-term program for economic recovery, in which the recovery of the real estate market is considered a breakthrough. .

Mr. Lich assessed, for an urban area of ‚Äč‚Äčover ten million people like Ho Chi Minh City, real estate is one of the nine key industries for economic development. The city has many years of experience viewing public investment as a stimulus to increase aggregate demand. Experience from practice shows that for every VND of public investment, social investment will be stimulated by 8-10 VND. If public investment is disbursed by VND 50,000-60,000 billion, the market will be stimulated by VND 500,000-600,000 billion.

According to Dr. Can Van Luc, member of the National Monetary Policy Advisory Council, the Government’s promotion of public investment and infrastructure development will create a great support to help the real estate market recover. In the period of 2021-2025, the total public investment capital of VND 2.87 million billion can be expected to reach 95% disbursed, higher than 75% of the 2016-2020 period. In the context of low interest rates, cash flow into real estate is likely to continue its uptrend in the near future.

Real estate market in District 7, South of Ho Chi Minh City. Photo: Quynh Tran

Mr. Luc added that, besides the push for public investment, the internal force of the real estate market remained at a positive level. Despite the difficulties caused by the pandemic, in the first 9 months of the year, 1,000 real estate businesses have been operating again. In the past three quarters, real estate businesses have issued VND 148,000 billion of bonds, accounting for 37% of the total value of corporate bonds issued, ranking second after banks.

The price of real estate shares (the group of real estate companies listed on the stock exchange) since the beginning of the year has increased by 27%, almost equivalent to the general increase of the stock market (up 29%). The data shows that capital continues to move into real estate, plus the effect of the public investment push, the real estate market’s chances of recovery are great.

Legal knots are removed

Mr. Vuong Duy Dung, Head of Housing Management – Real Estate Market (Ministry of Construction) said that a series of legal difficulties related to the real estate market have been focused on solving the phase 2020 – 2021.

In the first 6 months of the year, the Government issued many decrees related to the real estate market, removing many obstacles in the management of construction investment projects. The group of decrees detailing the Law on Housing includes Decree 30, Decree 69…

“In the near future, the Law on Housing and the Law on Real Estate Business will also be submitted to the National Assembly for amendment and promulgation one year earlier than expected”, Mr. Dung confirmed and said that there has not been a period of a series of laws and regulations. The policy regime is studied and revised so quickly. This development promises to create many recovery opportunities for the real estate market in the coming time.

Activate cheap home support

Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association, assessed that the aftershocks after the recent prolonged social distancing period caused the most exciting market in the country to stall, severely affected but still have hope. Real estate defrost from cheap housing factor.

Mr. Chau analyzed, after the pandemic, affordable and affordable housing, housing for workers and low-income subjects will become the focus. This is also the segment with the largest demand in the market today, but there is a shortage of products. In the coming years, Ho Chi Minh City plans to build one million houses, in 2021 alone, the Department of Construction sets a target of 300,000 houses. In addition, the policy of promoting the rebuilding of old apartment buildings, settling 20,000 houses on canals, and recommending businesses to build inns and rooms are also the foundation for the recovery of the real estate market. .

HoREA President acknowledged that the proposal of the Ministry of Construction for a credit package of VND 30,000 billion opens the scenario that there will be many social housing, many accommodation areas for workers to be supported to develop, in the long run to solve the problem. social security for low- and middle-income people. If it can be done like in 2013 through the mechanism of interest rate compensation, 1 VND of interest rate compensation can mobilize more than 30 VND, creating a great support for the recovery of the real estate market in the medium and long term.

Trung Tin

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