Effective solutions are needed for the real estate market.

(Baonghean.vn) - Nghe An province has approximately 200 real estate businesses (including investment, trading, and services). Currently, there are over 100 real estate projects, mainly in Vinh City (about 80 projects). The real estate market has created a significant housing supply for Vinh City and other urban areas in the province.

The real estate market in Nghe An province began to develop in 2007. In Vinh City and Cua Lo town, from the end of 2010 to April 2011, the market was very active, with prices increasing significantly for subdivided land plots, villas, residential land, and apartments, especially subdivided land plots along major roads in development projects. During this period, many businesses registered and implemented real estate development projects.



The real estate project on Phan Boi Chau Street has completed its infrastructure but still fails to attract customers.

However, since May 2011, the market has become sluggish, with few successful transactions, prices stagnating, and signs of decline. Those with genuine housing needs are still choosing a "wait and see" approach as the market shows no signs of price stability. Most are temporarily suspending real estate transactions in the hope that prices will continue to fall. Recent developments indicate that the real estate market is being manipulated by speculation and herd mentality. In particular, the massive influx into the real estate business has created an imbalance between supply and demand. The oversupply makes it difficult for developers to sell or rent properties to recover capital or continue development; real estate transactions are proceeding at a slow pace amidst the government's inflation control policies.

Forecasts indicate that the real estate market will face even greater difficulties in the near future, as credit institutions are tightening lending to real estate projects. High interest rates and short loan terms make it difficult for real estate developers to obtain capital to implement and complete their projects. According to Directive 01/CT-NHNN on the implementation of monetary policy and ensuring safe and effective banking operations in 2012 issued by the Governor of the State Bank of Vietnam, real estate investment and business is a discouraged sector. Therefore, in 2012, the banking sector will continue to strictly control and restrict credit granting to this sector, aiming to steer the real estate market towards the genuine needs of the people and reduce pressure on price increases.

Despite timely guidance from relevant authorities at all levels regarding the implementation of real estate projects according to planning, such as the annual inspection teams established by the Provincial People's Committee to monitor progress and resolve difficulties and obstacles, most projects are still behind schedule. Some projects lack synchronization in construction, the quality of infrastructure is unsatisfactory, and construction does not conform to approved plans and designs. This negatively impacts the urban architectural landscape and the lives of residents within the projects and surrounding areas.

It can be seen that among the many reasons leading to the slow implementation of real estate projects, one is the inappropriate business strategy of investors, who mainly invest in high-end, high-priced projects while the demand for housing for low and middle-income earners is very high but very few investors pay attention to it. The financial capacity of many real estate businesses is weak, with businesses mainly relying on bank loans and capital raised from customers. Many businesses lack experience in real estate business, and some even invest based on trends…

Besides those reasons, there is also a lack of attention and support from some levels and sectors in guiding and resolving difficulties for businesses. In particular, administrative procedures for real estate business are still complex and cumbersome, with many overlapping documents causing significant delays for investors, thus prolonging implementation time, increasing loan interest rates, and extending the payback period due to prolonged project implementation. Administrative procedures in investment, construction, land compensation, etc., still have many obstacles, slowing down investment opportunities for businesses and reducing the liquidity of the real estate market. The continued adjustment of land price frameworks causes compensation costs for land clearance and housing obligations to continue to rise, making it difficult for housing prices to fall to an affordable level for low-income earners.

On the other hand, regulations and procedures for selling housing to low-income earners are still complicated, making it difficult for this group to access projects and buy houses. The issuance of land use right certificates for real estate projects in general, and for individual households in particular, is time-consuming. Many apartment complexes and housing projects, although already operational, still have apartments that have not been issued land use right certificates (pink certificates) because the developers have not yet paid all the land use fees. Some investors have paid for houses but have not yet received pink certificates. Therefore, secondary investors are not very enthusiastic about buying, selling, and trading housing and office space for rent.

To revitalize the real estate market, in addition to solutions within the government's purview, our province also needs timely solutions such as: Focusing on improving administrative procedures to eliminate unnecessary steps and reduce processing time for investment and construction projects, land compensation and resettlement, land valuation, and land use right certificate issuance. Enhancing the sense of responsibility of officials and civil servants in performing their assigned tasks. Gradually researching and creating a clean land fund that conforms to construction planning so that real estate projects (and other projects) can be implemented quickly and promptly to meet the needs of investors when investment opportunities arise.

The province of Nghe An is implementing procedures for real estate business projects in accordance with Government Decree 71/2010/ND-CP. Depending on the specific situation and conditions, it is permitted to convert commercial housing projects to serve resettlement purposes and social housing projects for low-cost rental; it is also permitted to adjust the product structure of each commercial housing project and low-income housing project to suit market needs. A housing development fund will be established to support housing projects or provide preferential loans for purchasing housing for middle and low-income individuals, secured by the housing itself, with interest rates lower than business loans and as stipulated by the Provincial People's Committee. Investors are allowed to carry out compensation and land clearance work in one of two forms: Investors receive land use rights through transfer, lease, or capital contribution in the form of land use rights; Investors negotiate compensation for assets on the land. Subsequently, land users submit applications to return the land so that the State can reclaim it and allocate it to investors for lease to carry out projects… Credit institutions also need to increase loan terms for real estate business compared to other industries, in line with the characteristics of this type of business with a long capital recovery period.

With the active support of all levels and sectors, it is hoped that in the coming time, more real estate projects will be implemented effectively in the province, and especially, the real estate market will "warm up" again.

Hoang Vinh