Series of solutions to remove bottlenecks for the real estate market

Government policies are gradually removing difficulties in the real estate market, restoring investor confidence.

According to many experts, the two main bottlenecks of the real estate market are legality and capital. Legal problems have hindered the approval and licensing of projects for many years, causing limited supply. Incomplete laws also cause difficulties for businesses, create fear among buyers and reduce market transparency.

To address these issues, the Government established a Special Task Force at the end of 2022 with the aim of reviewing and removing difficulties for real estate projects. Localities also actively support slow-moving projects to complete legal procedures to bring products to the market.

The issued legal documents, for example Decree No. 10 on amending and supplementing a number of articles of the decree guiding the implementation of the Land Law, took effect from May 20. This Decree allows the granting of certificates for types of resort apartments, officetels, resort villas... on commercial and service land.

"This is a significant step forward in improving the legal framework and strengthening investor confidence. The decree directly impacts the resort real estate segment, which is considered to have great development potential in Vietnam, thereby contributing to promoting the tourism industry in general," said an expert.

Perspective of a resort real estate product. Photo: Flamingo Holdings — Perspective of a resort real estate product. Photo: *Flamingo Holdings*

In the context of the project development capital being largely dependent on bank interest rates and bonds, in early March, the Government issued Decree 08 with many changes. Specifically, issuers can pay principal and interest on bonds due with other assets; extend the bond term to a maximum of two years if there is the consent of bondholders; temporarily postpone regulations on professional securities investors... to help reduce pressure on investors.

The State Bank has lowered its operating interest rates three times in a row since the beginning of the year, showing that monetary policy is gradually reducing the level of tightening. The current average new deposit interest rate of banks is around 6.1% per year, down 0.37% per year, the average new lending interest rate is around 9.07% per year, down 0.9% per year compared to the end of 2022.

According to experts, low interest rates on deposits may cause customers to consider investment options instead of saving. The gradual cooling of lending interest rates is expected to become a lever for both businesses and investors, helping to increase liquidity and create momentum for the real estate market to recover.

Reports from many market research units noted that the real estate market picture from the beginning of the year until now has been quite quiet, despite the Government issuing many comprehensive support policies. The first quarter supply has not improved, and interest rates are still quite high compared to the capacity of many businesses.

Experts say that policies have a lag time from when they take effect to when they are put into practice. The first two quarters of this year are the time for the market to filter out investors with limited potential, while stabilizing investor sentiment. After the policies "gradually absorb", the market is then forecast to enter a new cycle that is more transparent and sustainable.

The third quarter is a crucial time when a large amount of bank deposits mature. This is also the time to decide whether cash flow will return to the real estate market or not. In a positive scenario, if the mobilization interest rate drops to 6-7% by the end of this year, or even does not decrease, the source of money will likely prioritize returning to the real estate market, under the condition that buyer confidence improves. Cash flow promises to focus on potential segments, benefiting from government policies and coming from reputable investors.

Recently, a number of large investors with strong financial potential have continued to develop, complete projects, and launch quality products. A typical example is Flamingo Holdings, with a large-scale, high-end resort complex project in Tan Trao, Tuyen Quang. The project is located along the Pho Day River, the gateway to the Tan Trao Historical Site.

Perspective of Flamingo Tan Trao Resort project - the first product of Flamingo Holdings in Tuyen Quang. Photo: Flamingo Holdings — Perspective of Flamingo Tan Trao Resort project - the first product of Flamingo Holdings in Tuyen Quang. Photo: *Flamingo Holdings*

With this project, the investor hopes to honor local identity, bringing the values that Tan Trao is lacking. Flamingo Tan Trao Resort is expected to provide more than 2,000 commercial and accommodation products, including a 4-star hotel, more than 300 shophouse products, homestays and a rich chain of resort and entertainment facilities.

With the appearance of the project branded Flamingo Holdings, Tan Trao promises to increase its tourism advantages, attracting a variety of types of tourists, especially high-end tourists and those with long-term accommodation needs.

"From its practical contributions to local tourism, Flamingo Tan Trao Resort is expected to be the key to profitability for agile investors, anticipating the underground waves of the real estate market in the coming time," the investor representative expected.

Hoai Phong

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