Property

At a recent conference on opening up capital for the real estate market, while businesses said capital from banks to real estate was slowing, the State Bank of Vietnam confirmed that it would not tighten real estate credit but would strengthen management of loans to the real estate sector, especially where there is risk. According to analysts, Vietnam should choose a flexible credit policy for each market segment to better match reality.

At the third session of the 15th National Assembly (NA) on June 8, Minister of Construction Nguyen Thanh Nghi identified nine problems and inadequacies in the country’s real estate market and proposed a range of solutions to develop the market stably, efficiently, and sustainably, such as perfecting the legal system, restructuring real estate credit, strictly controlling the issuance of corporate bonds in real estate, and boosting the transparency of information on housing and real estate.

The expansion of Hanoi and Ho Chi Minh City along with the implementation of key transport projects are creating opportunities for investors to develop mega-urban projects. According to the Vietnam Association of Realtors (VARS), urban projects with areas of 100 ha or more in districts far from the city center are the main source of supply for the real estate market.

The construction sector is working to increase the average housing area to 25.5 sq m per person this year and for the national urbanization rate to reach 41.5-42 per cent. In order to achieve these goals, the Ministry of Construction (MoC) has called for the revocation of public projects that are not really necessary and are ineffective, and for the scattered nature of investment to be addressed.

The No Va Real Estate Investment Group Joint Stock Company (Novaland), a member of the NovaGroup, has received a $250 million investment from Warburg Pincus. Warburg Pincus is the largest and most active private equity fund in Vietnam, with total disbursed and committed capital of more than $1.5 billion since 2013.

Analysts told the “Removing obstacles and promoting investment in the real estate sector” seminar on May 27 that it is necessary to quickly remove bottlenecks in the market so that it will not affect other markets. Real estate currently accounts for 25 per cent of GDP and involves at least 40 industries.