Rising demand for housing in urban areas in the 2021-2030, along with the Vietnamese government’s new policies on land, market transparency and bond issuances, is expected to spur the development of real estate market. (Photo: VNA)
Hanoi (VNA) – Rising demand for housing in urban areas in the 2021-2030, along with the Vietnamese government’s new policies on land, market transparency and bond issuances, is expected to spur the development of real estate market and opening up capital flows for businesses in the coming time, according to industry experts.
Statistics from the Ministry of Construction showed that the country’s urbanisation rate, which now stands at 40%, will expand to 45% by 2030.
With the current population growth rate and housing demand, around 70 million sq.m of urban housing is needed each year.
As the global real estate market is forecast to slow down in 2023, it’s hard for the Vietnamese market to avoid the impact. However, according to the Vietnam Association of Realtors (VARS), the segment of social and affordable housing will grow because urban development is still attracting the attention of investors.
Some investors like Vinhomes plan to build 500,000 social houses in the next five years. Him Lam and Hung Thinh also have plans to participate in the construction of social housing in the near future.
Given the fact that the supply of affordable apartments accounts for less than 2% of the total supply of new apartments in Hanoi and Ho Chi Minh City, the social housing segment can recover thanks to this supply and the support from the Government's new policies, said expert Nguyen Thi Cam Tu from Vndirect Securities Company.
She cited Government’s Resolution No 33/NQ-CP on solutions removing and promoting the development of a healthy and sustainable real estate market and Decree No.8/2023/ND-CP on amendment of a number of articles in decrees stipulating the private offering and trading of corporate in the domestic market as examples. They can help ease liquidity pressure in the short term, she noted.
In fact, real estate businesses are facing liquidity pressure when entering the peak period of bond maturity.
Illustrative image. (Photo: baodautu.vn)
According to Ho Chi Minh City Real Estate Association (HoREA), the volume of such bonds maturing in 2023-2024 will reach about 230 trillion VND (9.8 billion USD), including 119 trillion VND in 2023 and 111 trillion VND in 2024.
Le Hoang Chau, President of HoREA, said Decree No. 08 will have a very positive impact on the handling of 119,000 billion VND worth of bonds due in 2023.
Experts said that the issuance of recent legal documents has creates a legal corridor for businesses to access capital, thereby resuming their operation. Enterprises have a chance to restructure debt, extend loan principal and interest, gradually removing bottlenecks of the real estate market.
The Government has committed to build more than 1 million social housing and houses for workers by 2030 to meet the needs of middle and low income households. This move creates a driving force for businesses, especially those with land available suitable for building social housing projects./.
