Efforts to Rescue the Real Estate Market
The real estate market has been facing significant challenges recently, but the government is taking urgent action to address these issues and stabilize the market. Prime Minister Pham Minh Chinh has personally directed and led a series of working sessions with the Task Force under the Prime Minister’s Office to remove obstacles and restore stability in the real estate market. This unprecedented rescue effort is aimed at revitalizing the industry and ensuring its steady development.
A Special and Urgent Rescue Operation
Under the Prime Minister’s assignment, the Task Force, headed by Minister of Construction Nguyen Thanh Nghi, is tasked with resolving difficulties and obstacles in the market. At the local level, the Chairpersons of provincial and municipal People’s Committees also lead their respective Task Forces with similar objectives. Specific groups, projects, and investors are identified for targeted resolution. This intense and expedited rescue operation is considered the most determined and extraordinary in the history of Vietnam’s real estate sector.
According to Dr. Duong Nhu Hung from Ho Chi Minh City University of Technology, this rescue effort is unprecedented in terms of urgency and significance. From the beginning of the fourth quarter of 2022 to early 2023, the Party, Government, National Assembly, ministries, local authorities have issued nearly 20 resolutions, decrees, and directives to address market difficulties for businesses and investors. Numerous conferences and seminars have been organized with the direct participation of the Prime Minister to listen to opinions and suggestions, leading to effective solutions for overcoming challenges.
“The government, ministries, and local authorities have put in a great deal of effort to restore the real estate market. Experts believe that the current government actions have been resolute and unprecedented in their intensity. Numerous meetings have been held at the central and local levels, accompanied by the implementation of various mechanisms and policies. All management agencies, including the banking system, have been actively involved,” assesses Dr. Duong Nhu Hung.
Dr. Le Xuan Nghia, a member of the National Financial and Monetary Policy Advisory Council, highlights that the measures implemented by the Task Force to support the real estate market are being swiftly executed to prevent a market collapse. Whenever the real estate market declines, it affects the quality of assets held by the banking system and poses difficulties. Failing to handle these challenges due to a lack of financial capacity would ripple into other sectors. Real estate is an important industry in the economy with a high spillover effect, and it has consistently caused economic crises. Research on crises from the 1970s until now has shown that only exchange rates (which have rarely occurred in recent times due to floating mechanisms) and the real estate market are the causes of economic crises, especially in the past 15 years.
Hence, the issue is not only about recovering the market but also preventing major risks to the banking system and financial market. It is essential to promptly implement the decisions and mechanisms that have already been issued to resolve market difficulties.
Decisive Policies
In fulfilling their assigned tasks, the Task Force and the Ministry of Construction actively and proactively coordinate with the Prime Minister’s Office, relevant ministries, and departments to submit numerous reports and recommendations directly at the working sessions chaired by the Prime Minister and Deputy Prime Ministers. These units propose to the Government, Prime Minister, and Deputy Prime Ministers to issue various guidelines and resolutions with specific and determined measures to remove obstacles for the market and real estate businesses. This is evident in numerous documents, such as Resolution No. 33/NQ-CP dated March 11, 2023, by the Government on solutions to remove difficulties and promote safe, healthy, and sustainable real estate market development.
The Prime Minister and Deputy Prime Ministers have also issued a series of 12 documents, held multiple meetings and conferences, including: the conference on removing obstacles and promoting safe, healthy, and sustainable real estate market development on February 17, 2023; the conference on removing difficulties and promoting the development of social housing on March 16, 2024; a meeting with the Ministry of Construction proposing that the State Bank of Vietnam continue to lower interest rates on the VND 120 trillion credit package on November 16, 2024; a conference hosted by the Prime Minister summoning 18 enterprises to address business difficulties on March 14, 2024, and more.
In addition, the Task Force under the Prime Minister’s Office has reviewed, urged, and instructed the removal of difficulties and obstacles in the implementation of real estate projects for localities and businesses. At the same time, within their respective functions and assigned tasks, they have issued many guiding documents and clarifications to resolve difficulties and obstacles within their jurisdiction. The Task Force has directly worked with numerous provinces and cities, including Ho Chi Minh City, Hanoi, Da Nang, Hai Phong, Can Tho, Dong Nai, Binh Thuan, Binh Dinh, and major real estate companies to hear reports, review specific real estate projects, and provide guidance and solutions to remove obstacles.
Furthermore, the Ministry of Construction has issued 37 guiding documents and clarifications on various topics, such as planning, social housing, redevelopment of old condominiums, construction permits, project transfers, for provinces and cities, notably Hanoi, Ho Chi Minh City, Dong Nai, Thai Nguyen, Vinh Long, Son La, Thai Binh, Binh Dinh, among others.
To accelerate the development of social housing, implement the program “Investing in at least 1 million social housing units for low-income groups and industrial zone workers,” and carry out the VND 120 trillion credit program for preferential loans for social housing, housing for workers, redevelopment of old condominiums, the Ministry of Construction has issued numerous documents to urge and guide their implementation.
Significantly, Deputy Minister of Construction Nguyen Van Sinh summarized the results of the institutional reform, showing that the Government has submitted to the 15th National Assembly for consideration and approval the following laws: the Bidding Law No. 22/2023/QH15 dated June 23, 2023, at the 5th session of the 15th National Assembly; the Housing Law No. 27/2023/QH15 dated November 27, 2023, at the 6th session of the 15th National Assembly; the Real Estate Business Law No. 29/2023/QH15 dated November 28, 2023, at the 6th session of the 15th National Assembly; the Land Law No. 31/2024/QH15 dated January 18, 2024, at the 5th extraordinary session of the 15th National Assembly; the Credit Institutions Law No. 32/2024/QH15 dated January 18, 2024, at the 5th extraordinary session of the 15th National Assembly.
To date, the Task Force has issued concluding notices to each locality and real estate company for implementation reference.
In 2023, the Task Force received and handled 142 reports of difficulties, challenges, and recommendations from localities, businesses, associations, and investors related to 191 real estate projects. Among them, 129 reports were sent to the People’s Committees of provinces and centrally-run cities to urge, guide, and address these issues accordingly. Additionally, 13 reports were submitted to the Ministry of Planning and Investment and the Ministry of Natural Resources and Environment to request resolution guidance and remove difficulties for localities and businesses.
In the first two months of 2024, the Task Force received four reports of difficulties, challenges, and recommendations related to four real estate projects from localities and businesses. In accordance with their assigned authority, the Task Force handled the four reports, including three sent to the People’s Committees of provinces and centrally-run cities for resolution and one sent to the Ministry of Finance and the Ministry of Natural Resources and Environment for guidance and resolution of difficulties for localities and businesses.