Government agencies and provincial administrations are urged to expedite the resolution of market concerns and real estate developers to restructure their operations and capital inflows, which are seen as measures to support the property market.
| Real estate projects in Hanoi. Photo: The Hanoi Times |
Such is the request of Prime Minister Pham Minh Chinh in a directive issued on December 14, in which he stresses the need to take drastic measures to facilitate the development of the real estate market.
Under the directive, the Ministry of Construction is responsible for revising overlapping regulations hindering the implementation of real estate projects and accelerating the contractor selection to carry out social housing projects in major cities and industrial parks.
“The goal is to have at least one million social housing units in the next ten years,” stated the directive.
In response to the lack of access to credit loans, commercial banks must streamline their procedures to provide capital to qualified real estate and social housing projects on time.
The prime minister also urges the Ministry of Finance to monitor the corporate bond market situation and support real estate firms that are struggling financially.
In mid-November, Prime Minister Chinh set up a task force specializing in resolving bottlenecks in the real estate market.
A recent report from the Ministry of Construction showed real estate sector remains a key component of the economy, contributing 11% of the GDP.
However, the market has seen a significant drop in transactions in recent months, and many projects have not been able to proceed due to the lack of capital.
Experts attribute the problem to the government's restriction of bank credit in the market, along with strict regulations on the issuance of corporate bonds.
The Ho Chi Minh City Real Estate Association (HoREA) noted many real estate firms’ downscale operations and cut costs. Meanwhile, those struggling with working capital must resort to borrowing from other sources at high-interest rates.
Such a situation has impacted the real estate market in Hanoi. The city's housing supplies in the third quarter of 2022 dropped by 39% year on year to 3,600 units, the lowest figures in the past several years, according to the municipal Department of Construction. The department said most new supplies came from existing projects, concentrating in Hoang Mai, Long Bien, and Ha Dong districts, where land reserves are still abundant. They, however, are in the mid-priced to luxury segment and away from the city center. Meanwhile, the shortage of new projects and rising building materials have contributed to rising housing prices in Hanoi, up 5% from early 2022. |
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