Real estate market to reheat gradually in 2023, say experts

This was the verdict of industry experts during a roundtable on the Vietnamese real estate market, held last week in Ho Chi Minh City.

Dr. Nguyen Van Dinh, vice president of the Vietnam National Real Estate Association, stated that a number of reforms would be issued this quarter as he forecast the market's immediate future. By the end of Q2, there will have been several modifications to the management of certain issues.

"Presently, firms are required to restructure and realign their goods to make them simpler for consumers. Even the process from the administration to the ministries has evolved, so the real estate market will be more active by the end of the second quarter of 2023," Dinh said.

Dr. Tran Dinh Thien, a member of the Prime Minister's Economic Advisory Council, said, "Subsidies in the real estate market have been oriented towards the luxury category for a long time. Not dealing swiftly with the bottleneck concerns is not only wasteful for the economy, but also raises hazards, such as bad debt".

Dr. Can Van Luc, a member of the National Monetary and Financial Policy Advisory Council, echoed this sentiment, stating that the need to revive the real estate market has never been discussed as often as it is today. This indicates that the market comprises several odd components.

According to Luc, business debts are the most concerning problem at the moment. If real estate companies do not repurchase, the bond debt will become extremely significant. Many huge corporations, such as Novaland Group, are struggling to negotiate and pay maturing obligations. "The decree revising corporate bonds is also being urgently reviewed, even though it was just published in September 2022," Luc added. "It will establish circumstances to eliminate challenges for companies in light of the realities of the situation".

Meanwhile, the government is concentrating heavily on reducing legal obstacles, facilitating the clearance of hundreds of projects, restoring cash flow, and most crucially, restoring market confidence. This, according to Thien, is exposing some bright spots, but it is too early to determine whether all of this can be accomplished.

According to him, in order to tackle the difficulties of the real estate market on a basic level, more big steps are required.

The Vietnamese government’s new policies on land, market transparency, taxes, and bond issues are expected to help the real estate market in 2023 to pass through the current gloomy winter and help the market become more stable.

Hoang Nguyet Minh, senior director of Commercial Leasing at Savills Hanoi, discussed the short-term prospects of real estate investment at a VIR roundtable on February 7.

Some experts continue to be sceptical about the possibility of the real estate market entering a calm period and freezing liquidity at this moment.