Government’s drastic measures lighten real estate gloom

Drastic and synchronous measures taken by the government and the Prime Minister in recent times have proven effective in easing the real estate market’s struggles, said Nguyen Quoc Hiep, chairman of GP Invest, one of Vietnam's most prominent property developers.

Businesses clearly see the impacts of measures taken by authorities to remove difficulties, from bond debt rescheduling, solving institutional issues and capital sourcing to bank interest rates.

Among the measures taken was the issuance of Resolution 33, effective March 12, detailing certain solutions to resolve difficulties and promote safe, healthy and sustainable development of the real estate market.

Together, the policies have made the property market less gloomy. Many developers have shown signs of recovery, despite the large number of real estate businesses that have dissolved or shut down. The important thing is that implementation of Resolution 33 has removed the fear and restored confidence in the market.

For my company, GP.Invest, specific instructions from the government, the Prime Minister and the Prime Minister's Working Group have had directly impacts, with positive changes seen in its Palm Manor Viet Tri project (in the northern midlands province of Phu Tho).

The 58-hectare project had received an investment certificate in 2013 but site clearance related problems that lingered for many years had prevented its completion.

With directions from the Prime Minister, ministries and sectors together with Resolution 33, leaders of the provincial People's Committee announced on June 4, 2023 specific measures to speed up the project in accordance with the law, including partial allocation of land for the investor to be more proactive in implementing the project.

In particular, the committee has requested the Department of Justice for measures to settle compensation for households using land whose owner has died. The specific measures taken by local authorities have created a momentum for the Palm Manor Viet Tri project to provide products to the market in 2024.

Apart from the project in Phu Tho, those in Lang Son, Thai Nguyen and Hai Duong provinces have also seen positive changes.

We propose that the Prime Minister's Working Group asks provinces to submit reports every three months on projects with problems that have remained unsolved for more than 5 years and propose ways to deal with them.

Laws related to the real estate market were expected to be passed by the National Assembly in October 2023 and take effect in 2024. A series of projects implementing investment procedures from 2022 and 2023 will be impacted by the coming regulatory changes. Therefore, attention should be paid to the projects transitioning towards complying with the new laws.

While the government’s Decree 69 has specified cases where old apartment buildings will have to be rebuilt or transformed into other types of construction works, more specific and comprehensive guidance is needed to lure investors and pilot a number of projects before expanding.

Regarding social housing, we recommend reviewing the current regulations for homebuyers and developers to avoid unclear interpretations. The Ministry of Planning and Investment and the Ministry of Construction should agree on the allocation of land funds for social housing to localities for the latter to call on investors while setting criteria on technical and social infrastructure to make the projects more attractive.

Resolution 33 assigns the Ministry of Construction the task of submitting to the government for promulgation a decree stipulating the process and procedures for implementing projects to build commercial houses in urban complexes.

We hope that this decree will be issued soon to standardize steps and simplify procedures for businesses to deploy such projects.

* Speech at a dialogue between property developers and Prime Minister Pham Minh Chinh on August 3, 2023.