PM sets up taskforce to tackle hardships in Vietnam property market

Recently, Vietnam property market has been through a significant decrease in transactions, as several projects have not been implemented due to a lack of capital. Prime Minister Pham Minh Chinh has decided to set up a task force specialized in tackling with problems of companies and localities in property projects.

Address difficulties in Vietnam real estate market

The task force is led by Minister of Construction Nguyen Thanh Nghi, while Vice Governor of the State Bank of Vietnam Dao Minh Tu and Deputy Minister of Construction Nguyen Van Sinh would serve as vice heads. Members of the task force would include senior officials in fields of construction, finance-banking, planning and investment, natural resources and environment, and public security.

According to the Government’s decision, the task force would examine and help sub-national governments, companies in central cities of Hanoi, Ho Chi Minh City, and other provinces/cities dismiss bottlenecks in executing property projects.

Additionally, members of the task forces would submit changes to restrictions related to ground management, if needed. A current report from the Ministry of Construction commensurate property sector stays a key component of the economy, contributing 11% of the GDP.

However, Vietnam real estate market has seen a significant drop in transactions in recent months, and many projects have not been able to proceed due to a lack of capital.

Experts attribute the problem to the government's regulation of bank credit in themarket, along with strict regulations on the issuance of corporate bonds.

The Ho Chi Minh City Real Estate Association (HoREA) recorded many real estate firms' downscale operations and cut costs. Meanwhile, those struggling with a shortage of capital have to resort to borrowing from other sources at high-interest rates.

Main declines in housing supplies in Hanoi

Such a concern has affected the real estate market in Hanoi. The city's housing supplies in the third quarter of 2022 dropped by 39% year on year to 3,600 units, the lowest figures in the past several years, according to the municipal Department of Construction.

The department said most new supplies came from existing projects, focusing on the districts of Hoang Mai, Long Bien, and Ha Dong, where land resources are still plentiful.

They, however, are in the mid-priced to luxury segment and away from the city center. The lack of new projects and rising building materials, meanwhile, have contributed to an increase in the prices of Hanoi's houses, up 5% from early 2022.

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