Obstacles ongoing for local real estate market

Vietnam’s real estate market continues to face both legal risks and market risks, according to industry analysts.

There are risks from both within and without, including the impact of the Russia - Ukraine conflict, a sharp increase in inflation, a lack of land supply, and rising prices for energy and raw materials. Legal processes and procedures on land access and project operation and mechanisms to ensure risk prevention for market participants remain limited and can lead to the risk of disputes.

Demand for housing among all classes of society is high, especially low- and middle-income groups, while supply is still limited. Mechanisms and policies for the real estate market over recent years have not been clear or appropriate.

In order to overcome the challenges, Mr. Can Van Luc, Chief Economist at the Bank for Investment and Development of Vietnam (BIDV) and Chairman of the BIDV Training and Research Institute, suggested that real estate businesses make the most of the support from the government and apply the 5Rs model: Respond, Recover, Restructure, Reinvent, and Resilience in their business operations.

In addition, Dr. Vu Tien Loc, Chairman of the Vietnam International Arbitration Centre (VIAC) and former Chairman of the Vietnam Chamber of Commerce and Industry (VCCI), said there are always opportunities but also hidden risks. Therefore, in order to minimize the risks in the real estate market, business activities need to focus on legal issues, especially contract law, risk prevention, and legal disputes.