Property market starts new recovery “cycle”

According to a report recently released by the General Statistics Office, as of August 31, newly registered capital poured into the real estate sector reached US$2.4 billion, five times higher than the same period last year. If including newly registered and adjusted capital, registered FDI in the real estate sector reached US$2.55 billion, 3.7 times the level over the same period last year.

Newly registered capital poured into the real estate sector reached US$2.4 billion in the first eight months of 2024

Pursuant to Decree No.100/2024/ND-CP of the Government, from August 1, 2024, the Vietnam Bank for Social Policies (VBSP) will apply the interest rate for loans to buy, hire social housing, housing for the armed forces; build or renovate, repair houses at the same interest rate as loans for poor households (at 6.6 percent per year) to ensure the sustainability of the lending program and reduce the burden on the state budget.

In particular, the 2024 Land Law, the 2023 Housing Law, and the 2023 Real Estate Business Law, which officially started to take effect from August 1, 2024, are also expected to have strong impacts on the real estate market.

The 2024 Land Law is built on the political basis of Resolution No.18-NQ/TW of the Party, with the general goal: The real estate market, including the land use rights market, becomes a reasonable, fair and effective land allocation channel.

Do Bao Ngoc, Deputy General Director of Vietnam Construction Securities Joint Stock Company, said, “With new breakthroughs from the 2024 Land Law, innovative policies related to the housing and land sectors will help real estate businesses continue to develop as well as rotate capital flows and reinvest in previous projects. In particular, investors expect that the market has overcome the difficult period and started a new recovery cycle.”

According to experts, after each important legal adjustment, the Vietnamese real estate market enters a new development stage. From August 1, 2024 when the revised Land Law took effect, many new regulations are expected to create space for the market development, at the same time, they will solve the current difficulties of the real estate market, thereby creating more room for the country’s economic growth in general.

From the highlights, such as FDI investment attraction, innovations in policies and laws have been creating positive recovery results for the real estate market. Experts expect that the 2024 Land Law, when coming into effect, will contribute to removing legal “bottlenecks” and attracting FDI capital flows. The Law also adds many benefits to foreign investors, such as transfer of land use rights in industrial parks, industrial clusters, high-tech zones, use of land due to receiving transfer of real estate projects and expanding the method of receiving land use rights for foreign-invested enterprises.

The real estate market plays an important role in the Vietnamese economy. Exploiting and using land effectively, and promoting sustainable real estate development are considered the key to attracting large investment capital sources for economic growth. The 2024 Land Law, once put into effect, will certainly create great opportunities for the development of the real estate market, turning land into an “endogenous resources” to promote economic growth.