Mr. Nguyen Duc Cay, Chairman of the Board of the Constrexim Housing Development and Investment JSC

With 40 years of experience in the real estate industry, I have never seen property prices surge as sharply as they have today. This is a serious concern, because these prices are artificially inflated due to speculation by certain groups. This distortion of the market will lead to significant long-term damage for the public.

I have also observed that many local authorities are reluctant to sign investment approvals, which forces businesses to wait for extended periods; a situation that remains all too common. This results in delays to project timelines, causing great frustration for investors.

In other countries, real estate developers can easily project their investment returns because land prices are clearly set from the beginning when investment is approved. In Vietnam, however, investors face difficulties in forecasting costs due to numerous unforeseen expenses and lengthy approval processes that can take years.

As a result, property prices are driven higher to offset these additional costs. If we do not take immediate action to resolve this issue, it is the public who will ultimately bear the burden. I therefore urge the Vietnam Real Estate Association to continue raising awareness on this matter to support the real estate community and the property market as a whole.

Mr. Hoang Quang Phong, Vice Chairman of the Vietnam Chamber of Commerce and Industry (VCCI)

Real estate investment and business activities are key drivers of economic growth, significantly contributing to State budget revenue and accounting for a substantial share of national GDP. Ensuring the stable and sustainable development of the real estate market in the time ahead is an integral part of the broader national economic growth strategy.

Several laws relate to the real estate market, including the Land Law 2024, the Law on Housing 2023, and the Law on Real Estate Business 2023, which came into effect on August 1, 2024, and the Law on Credit Institutions 2024, which came into effect from July 1, 2024. These laws institutionalize new directives and policies from the Party and the State, addressing longstanding issues and challenges. They also aim to enhance transparency in land access and real estate market management, which are widely expected to foster economic and social development in the new phase.

Recently, however, the real estate market has shown signs of “heating up”. In the first nine months of this year there were 30,589 successful transactions, or 2.5-times more than in the same period of 2023. Among the 38,797 newly-launched products, the majority were priced above VND50 million ($2,000) per sq m. Meanwhile, affordable commercial apartments have nearly disappeared from the market.

Mr. Nguyen Quoc Hiep, Chairman of GP.Invest, Chairman of the Vietnam Construction Contractors Association

Complex administrative procedures remain a significant burden on businesses. The process of investing in a project is overly complicated, usually involving around 38-40 stamps, with an average processing time of 2-3 years.

For instance, an investment decision is handled by the provincial Department of Planning and Investment. However, to finalize it, they must obtain written opinions from several other departments, including the Department of Construction, the Department of Planning and Architecture, the Department of Natural Resources and Environment, and the Department of Finance, as well as district or local authorities where the project is located. This process typically involves at least five stamps. This is likely the primary reason why administrative procedures have not been streamlined, despite the Prime Minister’s clear instructions on this matter.

Another procedure that businesses find especially burdensome during project implementation is the process for adjusting planning. All projects need to make adjustments, albeit to varying degrees. However, regulations around planning adjustments are not clear. What constitutes a local adjustment? What requires changes at the sub-regional level? After planning adjustments, the investment decision often needs to be revisited as well. These processes impose a heavy load on businesses, especially for FDI companies, who view these procedures as a “maze” with no clear way to navigate.

These difficulties are barriers that slow down economic development and make the overall investment environment less appealing. To resolve the overlapping legal frameworks, we have proposed amendments to several key laws related to real estate and are urgently working on drafting and implementing proposed subordinate legal documents. However, since the relevant ministries are responsible for drafting, overlapping issues still persist, even though the process includes consultations with ministries and organizations affected by the laws. However, it is important to acknowledge that the consultation process is still insufficient and not comprehensive. We should consider adding mechanisms for monitoring and accountability in the process of issuing legal documents.

To address the issue of complex and cumbersome procedures, we recommend that each specialized agency in relevant fields establish specific “model processes” to streamline procedures. There should also be an oversight body to monitor how these procedures are implemented at the local level. This would not only reduce the time and financial burden on businesses but also expedite project launches, helping to increase the supply of real estate in various segments and ultimately reducing housing prices.

Mr. Vuong Duy Dung, Deputy Director of the Housing and Real Estate Market Management Agency

Through analysis, it has become evident that the supply of real estate is just one of the factors driving the increase in property prices in certain areas and regions.

The rise in real estate prices is also influenced by several other factors, including the recent increase in land-related costs and the impact of the new land pricing method and land price tables. Additionally, the practice of artificially inflating prices by speculators and unqualified real estate brokers, who take advantage of the public’s lack of knowledge and herd mentality, has contributed to price surges. These individuals typically lack proper real estate certifications, have limited expertise, and are not well-versed in legal matters, displaying poor business ethics. This results in opportunistic behavior, collusion to inflate prices beyond actual values, and market manipulation, which harms consumers and undermines market transparency.

Economic fluctuations in recent times, particularly in sectors like the stock market, bonds, and gold, have influenced the mindset of investors and the general public. As a result, there has been a shift towards real estate investments, with people using property as a secure “safe haven” for their accumulated funds.

To tackle rising housing prices and stabilize the real estate market, the Ministry of Construction has proposed several specific solutions to the government, Deputy Prime Minister Tran Hong Ha, and the Office of the Government. Among these proposals is consideration of a tax policy targeting individuals who own multiple properties. This policy would aim to curb speculative practices, such as buying and selling properties in the short term for profit, while ensuring that it aligns with Vietnam’s economic and social conditions as well as international standards.

The Ministry’s proposal stems from observations of the real estate market, where recent land-use auctions have shown that many individuals and groups are purchasing properties not for residential use, but with the intent to “flip” them quickly for profit. This practice creates artificial price inflation, benefiting speculators and brokers, which disrupts the market.

The objective of this proposed solution is to reduce speculative activities and price manipulation, while ensuring that people with genuine housing needs have better access to properties. It aims to foster a stable, healthy, and sustainable real estate market. This approach is widely used in many countries around the world.

Looking ahead, the Ministry of Construction, in line with its responsibilities, will continue to collaborate closely with relevant ministries, sectors, and localities to closely monitor the real estate market. This will allow for the timely identification of any anomalies, and, in partnership with relevant authorities, propose suitable measures to ensure the steady, safe, and transparent development of the real estate market in response to real-time conditions.

Mr. Le Hoang Chau, President of the Ho Chi Minh City Real Estate Association (HOREA)

HOREA has found that the commercial housing market is facing a significant shortage of housing supply, primarily due to legal obstacles affecting housing projects. Moreover, the housing product structure is increasingly skewed towards the luxury segment, with a notable lack of affordable commercial housing. This imbalance has led to a steady increase in housing prices over recent years. The real estate sector has also faced a crisis, which has caused severe liquidity and cash flow problems for many real estate companies in 2022 and 2023. Additionally, the majority of middle- and low-income urban residents, who need homes to live in, find it extremely difficult to purchase or establish home ownership.

To address this situation, HOREA recommends strengthening the role of the Steering Committee tasked with reviewing and addressing difficulties and obstacles related to projects, along with the government’s Task Force, the Prime Minister’s Task Force, and other task forces at the local level. This collaboration will help overcome obstacles in about 500 real estate and commercial housing projects nationwide, including around 148 projects in Ho Chi Minh City. These efforts would not only increase housing supply but also help reduce housing prices and reconfigure the housing product mix to focus on affordable commercial housing.

Furthermore, HOREA supports the goal of developing 1 million social housing units between 2021 and 2030. Currently, the interest rate for loans on social housing projects is 7.92 per cent per annum for developers selling or leasing these homes, which is 120 per cent of the “poverty household” rate of 6.6 per cent, and 6.6 per cent for buyers or renters of social housing. These rates are significantly higher than the commercial loan interest rates typically offered by financial institutions. Therefore, we propose reducing interest rates for loans to “poverty households” according to defined criteria to 3-4.8 per cent per annum at the Vietnam Bank for Social Policies. This would enable developers of social housing projects to borrow at preferential rates of 3.6 per cent or 5.76 per cent per annum, while buyers or renters could access loans at rates of 3 per cent or 4.8 per cent per annum.

HOREA also urges the National Assembly to amend the Law on Value-Added Tax and the Law on Corporate Income Tax to provide tax incentives for developers of social housing projects intended solely for rental purposes. Specifically, we suggest reducing the VAT rate to 3 per cent and the corporate income tax rate to 6 per cent, to encourage businesses to invest in social housing projects for rental purposes

Ms. Tran Thi Khanh Linh, Investment Manager at Savills Vietnam

The market continues to offer significant growth opportunities, supported by steady FDI inflows and rapidly-developing infrastructure, which drives demand across multiple real estate sectors, including residential, industrial, and office spaces. This dynamic has made the Vietnamese market increasingly attractive to investors.

The implementation of several new real estate laws in August has enhanced investor confidence by providing a more stable and transparent legal framework, making real estate projects more appealing. Currently, investors have various opportunities to engage in mergers and acquisitions (M&A) of promising projects or partner with local developers for large-scale developments. The broad market demand attracts a diverse range of investment profiles.

Foreign demand for residential real estate remains strong. International investors generally require projects to have clear legal status and be ready for development.

Specifically, most investors expect projects to have a detailed 1/500 master plan, with many also requiring a formal land-use payment notification. However, the approval process for project legalities has slowed recently due to the ongoing changes in real estate-related laws. As a result, the supply of residential real estate projects has been limited. This has prompted foreign investors to focus more on industrial and office projects, which are already operational, have clearer legal standing, and are easier to pursue for M&As.

Mr. Le Nhu Thach, Chairman of the BCONS Group

The demand for housing in Ho Chi Minh City is extremely high at present, with an estimated need for about 50,000 apartments annually to meet the demands of the population. However, supply is unable to keep pace with this demand due to various factors. Among these, legal hurdles, rising land costs, and the shortage of affordable apartments are the main reasons why the market cannot develop in a balanced manner.

Some 60-70 per cent of current housing demand falls within the affordable price range. Meanwhile, the average apartment price in Ho Chi Minh City varies from VND40-60 million ($1,600-$2,400) per sq m in suburban districts, and up to VND100 million ($4,000) per sq m in central areas, which is beyond the reach of many middle-income families. This highlights the urgent need for housing solutions that are affordable for people, particularly those with medium or low incomes.

Given the strain on infrastructure and the rapid pace of urbanization, there is a growing trend of people relocating to suburban areas. Therefore, it is essential to promote urban development based on public transportation, known as TOD, or Transit-Oriented Development, enabling suburban projects to offer affordable housing while maintaining access to essential amenities and services. This approach is becoming a necessary trend in modern urban planning.

Metro Line No. 1 will extend from Ben Thanh to Suoi Tien in the Thu Duc area, near the Vietnam National University, Ho Chi Minh City, while the development of transport links to Dong Nai and Binh Duong provinces and Long Thanh International Airport is also underway. These transport connections will support investment in the upcoming period, driving growth in real estate projects in the area and providing long-term, sustainable investment opportunities in suburban areas.

As for the development of affordable apartments, in my view, the price of the product should align with the buyer’s purchasing power. At BCONS, after conducting thorough market research, we typically design apartments with areas of 40 to 60 sq m, featuring two bedrooms, to ensure the cost remains reasonable and accessible for our customers. Typically, we offer 40 sq m apartments priced at around VND1 billion ($40,000), and 60 sq m apartments priced between VND1.5 and VND2 billion ($60,000-$80,000). We also focus on creating optimized, smart designs that provide functional living spaces and essential amenities for users.