By
Lien Thuong, Hai Yen
Mon, October 28, 2024 | 7:27 am GMT+7
A number of stalled property projects in Vietnam have resumed construction on the back of the government’s support and improved legal framework.
A Vietnam Association of Realtors (VARS) report says that in Hanoi, notable projects that have resumed include Ha Noi Melody Residences in Linh Dam district, QMS Top Tower apartment complex on To Huu street and The Summit Building on Tran Duy Hung street.
In the southern region, restarted projects include the ECity Tan Duc urban area developed by Tan Tao Group in Long An province; and Astral City developed by Phat Dat Group in neighboring Binh Duong province.
A stalled property project in Tan Binh district, Ho Chi Minh City, southern Vietnam. Photo by The Investor/Dang Kiet.
The revival of these stalled projects is being driven by government support and private sector engagement, particularly through mergers and acquisitions (M&As), the report says.
The government has introduced tax cuts and relaxed borrowing conditions to help developers continue their projects, it notes.
Moreover, under three new real estate related laws, any projects that remain idle for 48 consecutive months will have their land revoked without compensation – a provision that has prompted developers to hasten the resumption of construction.
Additionally, the engagement of new investors, especially foreign ones, in Vietnam’s real estate market, particularly through M&As, has increased.
The growing demand for housing is also expected to drive the restoration of suspended property projects. However, the revival of some projects has been hampered by developers’ financial difficulties and high selling prices tht exceed the quality of the properties, the report says.
VARS recommends that developers seek suitable partners to jointly implement their projects so as to ease financial pressures.
To increase housing supply and reduce property prices, the government should do more to remove legal obstacles for developers and prioritize resolution of issues related to stalled projects, it adds.
Housing supply in Vietnam fell 25% quarter-on-quarter to 22,412 units in Q3/2024, but the number marked a 60% increase year-on-year, an earlier VARS report has said.
In the first nine months of 2024, a total of 38,797 new units were put up for sale. Of these, 70% were apartments, predominantly those priced at over VND50 million ($2,004) per square meter.