Legal changes expected to increase appeal of Vietnam's real estate market

The global economic slowdown, the impact COVID-19 pandemic, and internal difficulties have put Vietnam’s real estate market in a tough situation.

Responding to the situation, Vietnam has issued policies on economic recovery and development, particularly for the recovery of the real estate market.

Speaking at a recent workshop seeking measures to increase the attractiveness of the market held by Nha dau tu (Investors) magazine, its Editor-in-Chief Nguyen Anh Tuan said that Vietnam is considering amendments to the Land Law, the Law on Real Estate Business (amended) and the Law on Housing (amended). These moves should bring positive changes to the market.

Deputy Minister of Construction Nguyen Tuong Van said that on average, the construction and real estate industries contributed about 11% of GDP in recent years, in which the real estate industry directly made up about 4.5%. 

Foreign investment in this field has continuously increased and made an important contribution to the development of the market.

Up to now, FDI capital in the real estate sector has reached 66.4 billion USD, accounting for 15.1% of total FDI capital in Vietnam and continuously maintaining the 2nd or 3rd position in FDI attraction. However, in the last few years, the real estate market has faced many difficulties and challenges.

Van said the Ministry of Construction has presided over the drafting of the Law on Housing (amended) and the Law on Real Estate Business (amended). These are two laws of great significance, attracting the attention of people and the business community at home and abroad.

The amendment and completion of the two laws will have a positive impact on the housing and real estate market, drastically improving confidence in the investment environment, and creating transparency and stability for the housing market in Vietnam. 

"Once approved, the amended laws will also help Vietnam's real estate market become more attractive to foreigners living and working in Vietnam and foreign investors,"  Van confirmed.

Nguyen Anh Tuan, Deputy Director of the Foreign Investment Agency under the Ministry of Planning and Investment, said that real estate is one of the fields that have attracted many foreign investors to Vietnam. Currently, investors from 48 countries and territories are investing in the real estate market in Vietnam.

To get high-quality FDI real estate investors, Vietnam needs to focus on several solutions, including perfecting legal regulations on the real estate market. This includes new types of real estate such as smart cities, resort real estate, real estate combined with healthcare, condotels, and officetels in line with international practices.

The country should target investors that have good financial capacity and solutions associated with green and sustainable economic transformation, he said.

Investors have a responsibility to the environment and society during the investment process in Vietnam, he added.

In addition, the flexible and systematic management of monetary policy tools is needed to meet the credit capital demand for the development of the real estate market, creating favourable conditions for businesses, home buyers, and investors to access credit sources.

Reducing lending interest rates is also a solution, according to the official.

He said that along with the continued improvement in infrastructure which facilitates the development of the real estate market, Vietnam needs to improve the business investment environment, and promptly remove difficulties relating to policies, especially for projects that use large areas of land and have been long delayed./.