The Land Law to the Rescue
Can 2024 revive real estate?
Good morning! Hello to new readers, and welcome to the latest edition of the Vietnam Weekly, written by Ho Chi Minh City-based reporter Mike Tatarski.
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On to the news.
On January 18, the National Assembly passed the long-awaited revised Land Law during its 5th extraordinary session.
That same day, assembly members also approved the amended Law on Credit Institutions, with the bulk of both laws coming online on January 1, 2025.
These votes came on the heels of a disastrous year for Vietnam’s real estate market, particularly here in Ho Chi Minh City and surrounding southern provinces.
I’ve covered this subject frequently, but here are some prominent points from recent months:
The number of land transactions in the south fell by up to 98% year-on-year in 2023
Shophouse rents in HCMC continue to fall amid low demand, while some home and apartment landlords plan to increase rent after Tết, even though other landlords are already losing money after raising rents
Townhouse prices in HCMC have hit a record high - US$14,000 per square meter - even amid low demand since the only available properties are in the luxury segment
Total townhouse and villa transactions in the south fell 92% last year, reaching their lowest level in five years
Up north, demand for townhouses and villas in Hanoi fell to a decade-low
In that dreadful context, the new land and credit institution laws - combined with the previously passed housing and real estate business laws - have been portrayed as the cure to real estate ills.
Zing News (which quietly reappeared from its vague suspension rebranded as Z News) quoted the chief economist at BIDV Bank on the topic:
“Never before have we had the opportunity to adjust four important real estate laws at the same time…This helps synchronize policies and increase transparency for the real estate market…The laws will also resolve historical shortcomings, contributing to exploiting the resources of the real estate market.”
This is complicated stuff that goes well beyond my general knowledge, so I spoke to a few experts to understand what these new laws mean for real estate.