The mark of 2023: Intensive efforts to "rescue" the real estate market

Never before have so many efforts been taken to "rescue" the real estate market as in 2023.

Intensive "rescue" efforts

Government authorities presided over a meeting in February 2023 to address and support the safe, healthy, and sustainable growth of the real estate industry. The conference sought to examine the present situation of the real estate market, identify issues and bottlenecks, and provide solutions to ensure the sector's continuing healthy and sustainable development.

The market has begun to show significant positive signals in the second half of the year.

Furthermore, a number of policies were issued, including Resolution No. 58 dated April 21, 2023, on key policies and solutions to assist businesses in proactively adapting, recovering quickly, and achieving sustainable development by 2025; Resolution No. 33 dated March 11, 2023, on some solutions to remove obstacles and promote the safe, healthy, and sustainable development of the real estate market; and Decree No. 12 dated April 14, 2023, on extending the deadlines for value assessments.

In 2023, the government created a Task Force led by the Prime Minister to handle real estate market issues. As of now, the Task Force has received 130 reports on 183 real estate projects around the country. In the last quarter, twenty projects were explicitly targeted for completion.

Significantly, the Amended Real Estate Business Law and the Amended Housing Law were officially enacted by the National Assembly in early November 2023.

To boost credit, the Prime Minister and the State Bank of Vietnam (SBV) have taken a number of steps to alter regulations, issue directives, and undertake coordinated measures to make it easier for enterprises and individuals to get credit. At the same time, this helps to stimulate the real estate market.

In terms of interest rates, the SBV continually reduced four times the operational interest rates downward in the first half of the year, with reductions ranging from 0.5 to 2.0% each year. These changes are intended to make it easier for credit institutions to get cash from the SBV at a cheaper cost, allowing them to drop interest rates on loans to serve consumers with capital requirements.

Furthermore, the SBV has been in conversations with commercial banks to discover ways to cut expenses and slash interest rates. Currently, commercial bank interest rates have dropped by 1.5 to 2%, depending on the kind of loan. Many banks also provide advantageous loan programs.

Recently, Directive No. 1376/CD-TTg, dated December 17, 2023, was published in the backdrop of a real estate market that is exhibiting signs of improvement but still faces several obstacles.

Signals of recovery

Positive signs began to emerge in the second part of the year as a result of the government's and related agencies' efforts to execute market management measures. This is evident in the market's steady recovery of liquidity, as well as robust supply.

The real estate market is showing indications of revival, with liquidity increasing 1.5 times during the second quarter. Photographer: LV Customer hesitancy has lessened, and transactions have surged near the end of the year.

According to VARS data, the real estate market was more vibrant in the third quarter, with liquidity exceeding 6,000 transactions, a 1.5-fold rise over the second quarter and a twofold gain over the first quarter of 2023. Customers' and investors' hesitation has been alleviated in particular.

In his assessment of the market, Mr. Dau Minh Thanh, Chief of the Office of the Ministry of Construction, predicts that the real estate market would remain sluggish in the first half of 2023. However, the decisive actions taken by the Government, the Prime Minister, the Ministry of Construction, and communities to resolve challenges have achieved results in the last six months. Obstacles have steadily been removed, and the market condition has improved.

Experts feel that the government's attempts to resolve problems have contributed to the real estate market's "revival." The new rules in the two modified laws, in particular, are viewed as a "stepping stone" to assist the real estate market in recovering and becoming more transparent.

According to estimates, the real estate market would gradually warm up beginning in the middle of 2024 as a result of "help" from government investment projects and lending regulations.