Dear readers,
A real estate market is a crucial component of each and every economy and all social communities. A healthy market not only meets housing needs, promotes urbanization, and develops supporting industries, but also contributes to economic growth, boosts import-export value, mobilizes investment capital, creates jobs, ensures social security, and contributes to the State budget, among other benefits. Conversely, a real estate market may also have unpredictable consequences for the economy and society, especially if a real estate “bubble” is formed and then bursts.
It is therefore easy to understand why the State, businesses, investors, brokers, and individuals, especially those with a genuine need for housing, hope the real estate market will develop in a stable and sustainable manner.
Unfortunately, however, Vietnam’s real estate market has in recent years, and especially in the last two years, slipped into a degree of instability, dominated by an extremely unusual rising price spiral. Behind this complex situation is a “misalignment” in many stages of the market, especially a supply-demand imbalance, stemming from a host of obstacles and bottlenecks.
Legal issues have appeared due to a lack of synchronization and insufficient guiding documents for the implementation of laws, decrees, and resolutions related to the real estate sector; limitations in State management (in fiscal and monetary policies for the sector, as well as in controlling prices and real estate speculation); imbalanced investment in different segments, leading to supply-demand “misalignment”, with the affordable segment seeing high demand but low supply; while the mid-range and high-end segments are the opposite; unreasonably high land prices that push housing prices upwards and are often “inflated”, causing market disruptions; credit for real estate growing excessively compared to overall credit in the economy; and, last but not least, a lack of market transparency.
The consequences of these ills have contributed to ever-increasing housing prices, which are now beyond reach for the majority of people who genuinely need housing.
Our Cover Story in this edition therefore looks at solutions to the housing price issue.
Professor Tran Phuong, former Member of the Party Central Committee, former Deputy to the National Assembly, former Vice Chairman of the Council of Ministers, former Chairman and Honorary Chairman of the Vietnam Economic Association - the managing agency of Tap chi Kinh te Viet Nam / Vietnam Economic Times / VnEconomy - passed away on October 18 at the age of 99. With a life spanning nearly a century and with 80 years of Party membership, Professor Tran Phuong made many contributions to the revolutionary cause of the Party and the scientific cause of the country. He was also a pioneer in establishing and leading the Vietnam Economic Association for over 50 years, while diligently organizing and directing Tap chi Kinh te Viet Nam / Vietnam Economic Times for more than three decades. With gratitude and respect for such a great man, in terms of human morality and intellectuality, we dedicate a Special Report in this edition to recalling his life and career, as a sincere gesture in memory of the respected Professor.
On behalf of all staff at Tap chi Kinh te Viet Nam / Vietnam Economic Times / VnEconomy, I extend my deepest condolences to Professor Tran Phuong’s family.
Warmest regards
Dr. CHU VAN LAM
CHAIRMAN OF THE EDITORIAL BOARD
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