Apartment prices 'cool down' as laws related to real estate market take effect

The apartment segment in the real estate market in May 2024 no longer saw the phenomenon of pushing up prices and increasing prices as in the first quarter; transactions decreased sharply; investors switched to a wait-and-see attitude, waiting for new moves when the revised Land Law, Housing Law, and Real Estate Business Law are about to take effect and impact the market.

Cooling Down Data from Batdongsan.com.vn (Vietnam's No. 1 Real Estate Service Information Channel) just released at the end of May 2024 shows that the number of people searching to buy apartments in Hanoi in the first quarter of 2024 increased to a similar peak in August 2023, with the number of searches and prices increasing continuously every week. However, from April to May 2024, due to the large number of sellers, demand decreased.

Apartment prices 'cool down' as laws related to the real estate market come into effect.

In April, the number of searches for apartments nationwide decreased by 13%, and the number of listings for sale also decreased slightly by 3% compared to the previous month, March 2024. In May 2024, these indexes decreased correspondingly to April 2024. This shows that buyers are waiting for the impact of new policies coming into effect of laws related to the market. Many real estate brokerage owners in Dong Anh and Hoai Duc districts (Hanoi) said that in the first quarter of 2024, information that state management agencies tightened land use planning for commercial apartment projects caused apartment prices to skyrocket by 15-20% compared to their real value, and many projects were pushed up to "virtual" prices that were not commensurate with the infrastructure. However, since April 2024, the liquidity of apartments has shown signs of slowing down, only about half of the "peak" period. According to Mr. Nguyen Quoc Anh, Deputy General Director of Batdongsan.com.vn, consumers should clearly define the purpose of investment. If buying for living, they need to consider carefully. If investing in the short term, they also need to observe the market for liquidity. If investing in the long term and investing for the purpose of renting to generate cash flow, the apartment segment is still a type with high yield compared to other types of investment such as stocks, gold, savings, foreign currency, etc. Data from Batdongsan.com.vn shows that the 10 most searched apartment projects in Hanoi in the past 5 months include: Vinhomes Ocean Park Gia Lam, Vinhomes Smart City, Vinhomes Green Bay Me Tri, Thanh Ha Muong Thanh Urban Area, Xa La New Urban Area, Viet Hung Urban Area, Trung Hoa - Nhan Chinh Urban Area, Geleximco - Le Trong Tan Urban Area, Van Phu New Urban Area and Linh Dam New Urban Area. Most of these projects have relatively soft prices, with large primary supply and are concentrated in the West. In Ho Chi Minh City, apartment seekers are most interested in: Vinhomes Grand Park, Vinhomes Central Park, Celadon City, Q7 Saigon Riverside, Mizuki Park, Masteri Thao Dien, Vinhomes Golden River Ba Son, Sunrise City, Eco Green Saigon, CityLand Park Hills... most of which are large projects in densely populated areas. Regarding this issue, Dr. Nguyen Van Dinh, Vice President of the Vietnam Real Estate Association (Vnrea) commented that in the near future, when new laws related to the market come into effect, it can be resolved for many projects, helping to increase supply in the market. When supply increases, apartment prices will decrease, although not decrease deeply but will be stable. Expected laws to take effect soon On May 27, 2024, the Government issued Resolution No. 79/NQ-CP on the proposal to develop a Law amending and supplementing a number of articles of the Land Law No. 31/2024/QH15, the Housing Law No. 27/2023/QH15, the Real Estate Business Law No. 29/2023/QH15, and the Law on Credit Institutions No. 32/2024/QH15.

Specifically, the Government unanimously approved the proposal to develop a Law amending and supplementing a number of articles of the Land Law No. 31/2024/QH15, the Housing Law No. 27/2023/QH15, the Real Estate Business Law No. 29/2023/QH15, the Law on Credit Institutions No. 32/2024/QH15 as proposed by the Ministry of Natural Resources and Environment in Submission No. 58/TTr-BTNMT dated May 26, 2024 and the attached documents. The Government assigned the Minister of Justice, authorized by the Prime Minister, to sign on behalf of the Government the Government's Submission requesting the National Assembly Standing Committee to consider and submit to the National Assembly the Proposal to develop a Law amending and supplementing a number of articles of the Land Law No. 31/2024/QH15, the Housing Law No. 27/2023/QH15, the Real Estate Business Law No. 29/2023/QH15, the Law on Credit Institutions No. 32/2024/QH15 to the 2024 Law and Ordinance Development Program; submit to the National Assembly for consideration and decision on the development and promulgation of the Law according to the simplified procedures; comment and approve at the 7th Session of the 15th National Assembly (May 2024). Previously, on May 26, 2024, Deputy Prime Minister Tran Hong Ha signed Official Dispatch No. 53/CD-TTg of the Prime Minister on accelerating the progress of development and promulgation of documents detailing the implementation of the Land Law, Housing Law, Real Estate Business Law and Law on Credit Institutions. In the Official Dispatch, Deputy Prime Minister Tran Hong Ha requested the Chairmen of People's Councils and Chairmen of People's Committees of provinces and centrally run cities to direct the acceleration of the progress of development and promulgation of documents detailing the implementation of the above laws, in order to build a complete, synchronous legal corridor, and promptly implement immediately after the Laws: Land, Housing, Real Estate Business, and Credit Institutions are approved by the National Assembly to take effect soon (expected from August 1, 2024). Receiving this information, real estate experts said that if the provisions in the new laws are implemented drastically and effectively, real estate prices in general and each segment in particular will decrease. In fact, real estate prices increase due to input costs such as land prices, construction costs, capital costs, etc. all increasing. In addition, legal bottlenecks lead to prolonged project implementation time, increasing investment costs compared to the original plan, causing real estate prices to increase continuously over the years. According to Vnrea representative, in the current context, the solution for the real estate market to develop transparently is to organize and implement new laws well. Hopefully, these new laws will be quickly put into practice and implemented resolutely and effectively.

Van Son/Tin Tuc Newspaper

Source: https://baotintuc.vn/kinh-te/gia-chung-cu-ha-nhiet-khi-cac-luat-lien-quan-den-thi-truong-bat-dong-san-co-hieu-luc-20240601080958117.htm