Boom or Bubble: Why Real Estate Prices Are Skyrocketing as Investors Snap Up Properties

Real estate bubble of group interests

On the morning of October 28, opinions were raised in the conference hall on the Report of the Supervision Team and the draft Resolution of the National Assembly on the results of supervision of the topic “implementation of policies and laws on real estate market management“. real estate and social housing development from 2015 to the end of 2023”, delegate Ta Van Ha (Quang Nam Delegation) stated the fact that the real estate market has increased prices suddenly, in addition to institutional problems, policy, there are signs of manipulation, manipulation and price inflation, creating a real estate bubble by an interest group.

The delegate of Quang Nam delegation said: “It is necessary to closely and accurately assess the problem, thereby pointing out specific and fundamental solutions. The draft Resolution has assessed the limitations, but mainly are still limitations in policies and laws, but there are still unusual factors, sudden price increases, 2-3 times higher, not appropriate to the situation. common reality and people’s needs”.

Delegate Ta Van Ha (Quang Nam Delegation). Photo: National Assembly

Also according to Mr. Ha, one of the solutions to reduce real estate market prices is real estate bonds. However, currently, real estate bonds are issued with an interest rate of 12-15%, plus about 3% issuance fee. Thus, the goal of issuing real estate bonds, outstanding debt in this field until maturity is under great pressure. If there is no strict control to restore and develop the real estate market, bond issuance will be ineffective. Having to pay such high interest rates for about 3 years can easily create a burden for the State and the People. Even causing the risk of increased bad debt and even default.

“Therefore, in the coming time the real estate market cannot cool down and people will not have the opportunity to access the market. Therefore, it is necessary to research solutions and conduct inspection, examination, and review of the fundamentals to restore and develop the real estate market in a healthy and right direction,” delegate Ta Van Ha suggested.

Delegate Hoang Van Cuong, Hanoi delegation

Appreciating the report of the Supervision Team on “the implementation of policies and laws on real estate market management and social housing development from 2015 to the end of 2023”, delegate Hoang Van Cuong (Delegation Hanoi) at the same time said that it is necessary to build a professional real estate trading floor management mechanism.

According to delegate Hoang Van Cuong, real estate prices are unusually high due to the increase in people buying real estate for accumulation, causing high cash flow to be pushed into real estate, not flowing into production business; Real estate supply is increasingly scarce; Besides, market forces such as brokers and auctions deliberately push prices up to make profits.

“What stands out is that real estate prices in big cities are very high and continuously increasing, exceeding the payment level of the vast majority of people in need of housing, and at the same time income from real estate is low compared to with the cost of real estate investment,” Mr. Cuong commented.

Removing institutional “bottlenecks”.

Through studying the Monitoring Report, delegate Dang Bich Ngoc (Hoa Binh Delegation) emphasized that in order to promptly remove institutional bottlenecks and deal with projects with legal problems, many policies and laws must be resolved. The real estate market management law has been promulgated, contributing to creating a legal framework for the development of the real estate and social housing market.

Delegate Dang Bich Ngoc stated that the report also clearly shows that the source of capital support from the State budget for preferential credit programs for social housing is still low, and the lending process and procedures through the Policy Bank are still low. Society is still complex and overlapping; The maximum loan level for social policy beneficiaries is low and not consistent with socio-economic conditions…

Delegate Dang Bich Ngoc (Hoa Binh Delegation). Photo: National Assembly

With these shortcomings, delegate Dang Bich Ngoc said that it is extremely necessary for the National Assembly to conduct supreme supervision on the implementation of policies and laws on real estate market management and social housing development. , timely, especially pointing out the institutional “bottlenecks” that need to be removed in the near future.

Therefore, delegates requested the Government to continue to carefully review the shortcomings and limitations of policies and laws in real estate market management and social housing development.

“In addition to the 22 remaining problems and inadequacies in policies and laws after the Real Estate Business Law, Housing Law 2023 and Land Law 2024 are promulgated, it is necessary to continue to review and study the issue. Promptly and synchronously propose solutions to quickly remove institutional bottlenecks, appropriately and decisively resolve real estate projects facing difficulties, legal problems, and stagnation. Due to the long implementation process and many changes in the law over time, it meets the requirements of sustainable development of the real estate and social housing market,” Ms. Ngoc suggested.

At the same time, according to the Hoa Binh delegation, the institutional inadequacies and overlaps pointed out in the Monitoring Report are an extremely important basis for the drafting agencies to update, research and amend the regulations. Law projects right from this Session, especially the Law on Urban and Rural Planning and the Law on Public Investment. In particular, it is necessary to research regulations in the direction of promoting decentralization and decentralization of power to localities to enhance the role, initiative, and responsibility of local governments in accordance with their capacity and associated with resource allocation. .

Sharing opinions on continuing to effectively implement the group of institutional solutions, delegate Duong Khac Mai (Dak Nong Delegation) said that policies and laws on real estate market management and housing development society has not kept up with the rapid development of the market. Some regulations are not synchronized and unified between laws on real estate business and related regulations such as laws on land and housing…

In addition, state management responsibilities for real estate business are lacking and unclear, affecting the effectiveness of management. The situation of declaring land transfer prices lower than the actual price to avoid taxes is still common. Regulations on conditions for beneficiaries of social housing policies and land investment processes for social housing development still have shortcomings…

Delegate Duong Khac Mai (Dak Nong Delegation). Photo: National Assembly

According to delegates, the cause of these shortcomings and limitations is due to the lack of comprehensive forecasting of the market situation and the ability of the advisory staff to evaluate and analyze legal regulations. The real estate structure is not appropriate, there are no unified regulations on the proportion of land to build social housing and luxury apartments. Implementing monitoring and declaring prices upon notarization and actual real estate transaction prices is very difficult.

From the above reality, delegate Duong Khac Mai suggested: “It is necessary to continue to effectively implement the group of institutional solutions in the coming time. Continue to review, amend and complete relevant laws such as Land Law, Housing Law, Real Estate Business Law… Build a public and easily accessible real estate market information system for people clearly understand land prices, to limit speculation and price inflation. Along with that, the delegate proposed assigning the Ministry of Construction to advise and promulgate mechanisms and policies to strictly manage investors of social housing projects; At the same time, coordinate to evaluate and review difficulties and obstacles in preferential credit policies on social housing.”