INTERNATIONAL EXPERIENCES IN REAL ESTATE MARKET MANAGEMENT 2025
INTERNATIONAL EXPERIENCES IN REAL ESTATE MARKET MANAGEMENT AND DEVELOPMENT: LESSONS FOR VIETNAM
MSc. Vo Cong Hau
Nguyen Tan Thanh
Ho Chi Minh City University of Transport
Abstract: This article analyzes the current state and prospects of Vietnam’s real estate market while drawing lessons from developed countries such as the USA, Australia, and China. The content emphasizes the necessity of a transparent and efficient legal framework, real estate price control policies, risk management, and social housing development to ensure market stability and sustainability. The article also provides specific recommendations for state management agencies and relevant stakeholders in adjusting and developing Vietnam’s real estate market towards transparency, efficiency, and sustainability.
Keywords: Vietnam real estate market, real estate, land management, social housing, legal framework.
The real estate market plays an essential role in the economic development of every country. It is not only a significant part of the national economy, but it also strongly influences related industries such as construction, finance, and services. Sustainable development of this market creates favorable conditions for business activities, investments, and improves the quality of life for the people.
During the period of 2022-2023, Vietnam’s real estate market faced many difficulties, mainly stemming from legal issues and delays in resolving planning problems. However, with the passage of important laws such as the 2023 Law on Housing, the 2023 Law on Real Estate Business, and the 2024 Law on Land, the market is showing signs of recovery and is expected to develop more sustainably in the future.
In the early months of 2024, the real estate market recorded positive supply-demand movements, with many segments such as apartments, industrial real estate, and commercial real estate showing signs of improvement. Nevertheless, the recovery process is still uneven, particularly in the tourism and resort real estate segment, which continues to face many difficulties due to unresolved legal issues.
In response, the Party and the State have issued strong directives to support the recovery of the real estate market. Resolution 41 of the Politburo emphasized resolving obstacles and difficulties, particularly in the private sector, which is seen as the main driver of the economy. In addition, the National Assembly has passed three important laws, creating a more solid and transparent legal framework for the market.
Furthermore, the Ministry of Finance has directed the adjustment of regulations on land use fees and land rent, helping to reduce financial burdens for businesses and households. This aims to support and promote the recovery of the real estate market, while enhancing land access for businesses, especially in the agricultural and industrial real estate segments. These adjustments also play an important role in reducing input costs and increasing competitiveness for businesses in the economic development process.
The objective of this article is to analyze the experiences in real estate market management and development from countries with successful management systems, to draw valuable lessons for application to Vietnam’s real estate market. These experiences will help Vietnam build a transparent and efficient legal framework, thereby promoting the sustainable development of the real estate market, addressing current challenges, and capitalizing on future potential opportunities.
I. OVERVIEW OF THE INTERNATIONAL REAL ESTATE MARKET
1. Real estate management models in developed countries
1.1. United States
The U.S. real estate market is clearly segmented and regulated by both federal and state laws, with strict oversight from organizations such as the Multiple Listing Service (MLS). MLS is an online information system that allows real estate agents to access data on property transactions in specific areas. It provides transparent and detailed information, including sales prices, property conditions, and legal rights, creating a transparent business environment and minimizing risks for investors. In the U.S., real estate brokerage is strictly regulated, requiring brokers to have licenses, undergo training ranging from 60 to 120 hours, and have practical experience.
The U.S. is a vast country with a population almost four times that of Vietnam, yet it does not face instability or issues related to land disputes. One of the key reasons for the stability of the U.S. real estate market is its stringent and transparent management policies, which help ensure benefits for the economy and society as a whole. Vietnam can learn from the U.S. land management model to mitigate conflicts and issues currently faced in this sector.
– First, free trade policies and real estate ownership rights.
The U.S. implements very open free trade policies with land and real estate. Anyone, including foreigners, can buy and own real estate if they meet financial requirements. This ownership right is strictly protected by law, except for specific violations. This policy creates a transparent market, reinforces investor confidence, and ensures long-term stability.
Notably, the U.S. real estate market does not differentiate between citizens and foreigners, unlike many other countries where foreign land ownership rights are restricted. Although there are concerns that foreigners could hold significant portions of U.S. real estate, history shows that this has not caused significant market instability. In the 1980s, Japanese investors bought many properties in the U.S., but later sold them due to high maintenance costs. The stability of the U.S. real estate market, even during major upheavals, demonstrates the effectiveness of the country’s land management system.
– Second, the role of real estate taxes in market stability.
Real estate taxes are one of the critical factors in maintaining the stability of the U.S. land market. Tax rates range from 1% to 5% depending on the state and property value. This tax policy not only pressures those intending to speculate on land but also encourages efficient land use by buyers. This helps prevent land hoarding without specific usage plans, a common issue in Vietnam.
Additionally, real estate taxes are a primary revenue source for local governments, contributing to the development of public services such as education, infrastructure, and security. This ensures that land resources are used efficiently and enhances the quality of life for residents in the area.
– Third, transparency in planning and development.
Planning and construction in the U.S. adhere to clear and public regulations. Large enterprises often develop long-term residential area plans based on actual market demand. They only commence construction when confident about demand, minimizing risks from land speculation.
Construction in the U.S. is typically carried out in phases, meaning they build a small part, sell it, and then continue building the next part. This method helps companies manage risks well when the market faces difficulties. The transparency in planning and development processes has limited land speculation and kept real estate prices reasonable.
The U.S. real estate management model, combining free trade policies, real estate taxes, and transparent planning, offers valuable lessons for Vietnam. The stability of the land market has significantly contributed to the sustainable development of the U.S. economy and created a peaceful and stable living environment for society.
1.2. United Kingdom
It is forecasted that by 2024, the residential real estate market in the United Kingdom will reach approximately USD 360.27 billion and continue to grow, projected to hit USD 476.46 billion by 2029, with a CAGR (Compound Annual Growth Rate) of 5.75% during the 2024-2029 period.
The UK has a real estate management system with very stringent legal regulations, particularly the Land Law of 1925. Real estate transactions here are managed by government authorities to ensure transparency and protect the rights of both buyers and renters. Tax policies and land price controls in the UK also help prevent speculation and ensure the stability of the real estate market.
As a developed country, the UK has built and implemented a comprehensive real estate management system, aiming not only at fairness and transparency but also facilitating participation from all market players, from individuals to investors. Legal regulations on land registration and real estate transaction management have helped the system operate smoothly and efficiently.
– First, the legal framework in real estate management.
In the UK, regulations on land registration and real estate brokerage are key elements in regulating real estate transactions and trading. All real estate transactions must go through licensed brokers or solicitors to ensure professionalism and transparency.
Specifically, only certified solicitors are allowed to handle procedures related to property transfer. This includes document review, verification of legal requirements, and completion of transactions. The requirement that all related documents must be confirmed by solicitors has helped limit legal risks and protect the rights of parties involved in transactions.
– Second, the Real Estate Investment Trusts (REITs) model.
REITs in the UK were established in 2007, based on the Finance Act 2006, to create an effective real estate investment channel for both individual and institutional investors. REITs must adhere to the principle of distributing at least 90% of their income as dividends to investors, and at least 75% of their assets must be invested in real estate.
This model has proven effective in increasing liquidity in the real estate market and creating more investment opportunities for both individuals and institutions. By the end of 2009, the total market capitalization of REITs in the UK reached USD 37 billion with 22 listed REITs.
As of June 2022, the number of REITs in the UK had increased to 53, with the total market capitalization of the sector reaching USD 83.5 billion, according to data from the European Public Real Estate Association (EPRA). From 2020 to 2021, the market capitalization of REITs in the UK increased by 87.1%, but then decreased by 30.5% in 2022. The decline was mainly due to financial difficulties caused by the energy crisis, post-pandemic disruptions, and economic structure uncertainties.
Despite market challenges, REITs have become one of the top real estate investment options in the UK. One significant advantage of REITs is the exemption from corporate tax on income from property rental activities within the UK. However, REITs must comply with the requirement to distribute at least 90% of their tax-exempt income to investors within 12 months from the end of the accounting period. The remaining income from business or non-rental activities is subject to a 19% tax rate, which increased to 25% since April 2023.
It is noteworthy that REITs in the UK are not suitable for overseas real estate investments. However, if these barriers are removed, the UK’s REIT market could attract more investors, especially retail investors and asset managers. This would be an opportunity to drive market growth in the future.
As the largest REIT market in Europe, UK REITs significantly influence the development of the continental REIT market, and trends here often lead changes in the European real estate sector.
– Third, tax policies and real estate development incentives.
Real estate taxes are crucial tools in regulating the market in the UK, preventing land speculation. Real estate here is subject to taxes not only during transactions but also annually, such as property taxes, encouraging rational land use.
Additionally, the UK government encourages the development of social housing projects through preferential tax policies and financial support. Low-interest housing loan programs have made it easier for middle-income individuals to access housing projects.
– Fourth, housing associations and their role in providing social housing.
Housing associations in the UK play a pivotal role in providing affordable housing for vulnerable groups, including low-income individuals, the homeless, and people with disabilities. After the transfer of responsibilities from local governments in 1988, these associations became the main force in providing social housing, supported by the government and operating on a non-profit basis.
The associations not only provide social housing but also improve infrastructure and enhance the quality of life for residential communities. This helps mitigate housing shortages and provides a stable living environment for residents.
With a legal system and financial management tools like REITs, the UK has established a stable and transparent real estate market, making it easier and fairer for individuals and investors to access real estate. Lessons from this system can help other countries, including Vietnam, develop a more sustainable and effective real estate market.
1.3. Australia
Australia is distinguished by its modern and transparent real estate management system, focusing on protecting the interests of both investors and citizens. Thanks to a robust legal system, people can easily access information about property ownership and transactions through public databases. Additionally, Australia applies open bidding methods in real estate transactions, ensuring fairness and transparency throughout the process.
The Australian government has implemented various market control measures, such as property tax regulations and financial support policies for first-time homebuyers. The combination of strict legal management, modern technology applications, and supportive policies has helped Australia maintain the stability and sustainability of its real estate market.
The commercial real estate market in Australia, expected to reach a scale of USD 34.07 billion by 2024, is projected to grow to USD 51.14 billion by 2029, with an annual growth rate (CAGR) of 8.46%. The fluctuations caused by the COVID-19 pandemic in 2020 created opportunities for many real estate investors, as consumers increasingly favored e-commerce and many employees chose to work remotely. By 2022, with low-interest rates and government stimulus policies, Australia’s commercial real estate market had opened a new, promising era for investors.
Two main factors driving the commercial real estate market in Australia are urbanization and population growth. Additionally, emerging trends such as shared offices, digital connectivity, and improved accessibility have changed the market’s operation. The ability to adapt to climate challenges also requires innovation to sustain growth momentum.
According to a report by Cushman & Wakefield, the warehouse supply in Australia is facing a severe shortage. It is estimated that over the next decade, approximately 10 million m² of warehouse space will be needed to meet demand. By 2023, the vacancy rate in the national industrial real estate segment was about 1.2%, a record low compared to the usual balance of 5%.
In a survey of 130 investors from various regions worldwide, 86% chose industrial real estate as their top priority when investing in the Australian market, surpassing other sectors such as office, retail, and hospitality.
– First, real estate market management and regulation policies.
The Australian government regulates the real estate market primarily through financial instruments such as bank interest rates and taxes, rather than direct intervention in transactions.
Strict regulations on licensing for brokers and real estate agents also help ensure transparency and safety in transactions. The presence of Real Estate Investment Trusts (REITs) in Australia plays a significant role in enhancing market liquidity and providing stable income for investors.
– Second, the role of mortgage brokerage and real estate investment.
Mortgage brokerage is an essential part of the Australian real estate market, particularly in promoting housing mortgage loans. More than 30% of real estate transactions are conducted through brokers, demonstrating the robust growth of real estate investment loans in Australia, thereby facilitating investors’ participation in the market.
– Third, the Real Estate Investment Trusts (REITs) system.
The REITs market in Australia, one of the largest in the world, has developed significantly over the decades. Australian REITs operate under two main models: single trust funds and stock exchange-traded trust funds. These models provide flexibility for investors while helping the real estate market maintain high liquidity and offering stable benefits through dividends.
In summary, the Australian real estate market operates under stringent government regulation with policies on taxes, interest rates, and licensing for brokers. The REITs system plays a vital role in enhancing liquidity and providing stable income for investors, laying the foundation for the sustainable development of the real estate market in this country.
2. Real Estate Management Models in Developing Countries
2.1. China
China has one of the largest and most complex real estate markets, facing numerous challenges. The Chinese government tightly controls land ownership and real estate development through a strict legal framework and rigorous administrative measures. However, the market is confronted with serious issues such as real estate bubbles, speculation, and a significant disparity between developed urban areas and rural regions.
To manage these issues, the Chinese government has implemented various measures to stabilize prices and minimize speculation. Policies such as strengthened credit management and property taxation have helped mitigate the risks of housing bubbles while promoting social housing development, making housing more accessible to the populace at reasonable prices.
– First, real estate purchase management policies.
Since 1984, China has allowed foreign nationals to purchase housing within the country, but regulations were tightened in 2006 and 2007 to curb foreign speculation. Foreigners who have resided in China for at least one year are permitted to buy a single commercial property for residence, and purchases for speculative purposes are prohibited.
Additionally, to protect the domestic market’s interests, foreigners or international organizations intending to purchase real estate for non-private use must do so through foreign-invested enterprises, such as joint ventures or wholly foreign-owned enterprises.
– Second, regulations on payments and foreign exchange management.
The Chinese government enforces strict regulations on payment and foreign exchange management for real estate transactions involving foreign individuals and organizations. Buyers must use designated foreign exchange banks for payments and comply with government-mandated procedures to ensure transparency and avoid international capital flow issues.
– Third, policies to attract foreign direct investment (FDI).
China is recognized as one of the world’s largest recipients of foreign direct investment (FDI), particularly in industrialization and modernization. Since 1984, China has opened its economy, established special economic zones, and created tax incentive areas to attract foreign investment. In recent years, China has received an average of nearly $50 billion in FDI annually, significantly contributing to economic and real estate market growth.
– Fourth, impact on the real estate market.
Strict management policies, coupled with inflows of FDI, have driven the development of China’s real estate market, fostering economic growth. However, legal and regulatory challenges for foreign enterprises persist, exemplified by cases of “fake losses, real profits” or “fake joint ventures,” causing economic damage and eroding trust in international transactions.
– Fifth, lessons from China’s real estate market regulation.
China’s real estate management policies have evolved through several stages, from strict control to more flexible solutions to meet market demands. Key regulatory points include: curbing speculation, ensuring affordability for citizens, providing financial support to real estate enterprises and homebuyers, developing affordable rental housing, easing residency restrictions, improving the business environment, and protecting buyers’ rights, along with measures to address non-performing loans.
China has established a stringent real estate management system focused on protecting the domestic market and attracting FDI. Through regulations on property purchases and foreign exchange management, China’s real estate market has maintained stability and continued sustainable development amid volatile international contexts.
2.2. Thailand
A distinctive feature of Thailand’s real estate management system is the stringent regulations on land ownership for foreigners. Although land is privately owned, the Thai government does not allow foreigners to fully own land; they can only lease it. Specifically, foreigners are permitted to lease land for a term of 30 years, which can be extended twice, each time for 30 years, with a total lease period not exceeding 90 years.
For residential ownership, foreigners must have a business visa or retirement visa to be eligible to purchase a house. They are also only allowed to own up to 49% of the total floor area of condominium projects. Additionally, buyers must prove that the property is purchased with foreign currency funds transferred into Thailand, which helps the government closely monitor foreign capital inflows into the real estate market.
These regulations reflect Thailand’s caution in protecting the interests of its domestic citizens and limiting real estate speculation by foreign individuals or organizations. This approach helps Thailand maintain long-term stability and sustainable development in its real estate market.
2.3. Indonesia
The real estate market in Indonesia is projected to reach USD 64.78 billion by 2024 and continue to grow to USD 85.97 billion by 2029, with a compound annual growth rate (CAGR) of 5.82% during this period. Thanks to significant improvements in structural and macroeconomic policies over the past 15 years, Indonesia’s economy has achieved stable growth, enabling the country to advance development programs. The rapid population increase and urbanization have heightened the demand for real estate, making this market one of the fastest-growing sectors in the region.
Despite the impacts of the COVID-19 pandemic, Indonesia’s real estate market has shown resilience, with GDP from real estate activities reaching IDR 468.22 trillion (approximately USD 29.85 billion) in 2021. This figure demonstrates continuous market growth since 2014. The Indonesian government, along with foreign investors and organizations like the World Bank, has promoted affordable housing projects, supporting the real estate market’s development in the coming years. The “One Million Homes” (OMH) program, initiated by the government, aims to construct at least 1 million houses annually, with 312,290 houses recorded by the end of May 2021.
The growth of the middle class and high housing demand has driven the first wave of Proptech (property technology) in Indonesia, making it easier for buyers and renters to access information and transact through online platforms.
– First, real estate purchase and ownership policies for foreigners.
As of June 2011, Indonesian law stipulates that foreigners can purchase and own real estate in the country under specific conditions. Foreigners can lease land with an initial ownership period of 25 years, extendable twice, for 20 years and 25 years, allowing a maximum ownership period of up to 70 years.
Additionally, foreigners can buy land from Indonesian citizens or corporations with full rights such as buying, mortgaging, and inheriting. For condominiums and houses attached to land use rights, they can own them for periods ranging from 20 to 30 years, depending on the extensions granted by the national land management authority. To protect the interests of domestic citizens, the Indonesian government only allows foreigners to purchase real estate valued between IDR 15 billion and IDR 2 billion, ensuring that the affordable housing segment serves low-income domestic groups.
– Second, protection and sustainable development policies.
The Indonesian government is striving to adjust real estate policies to avoid speculation while protecting the interests of low-income citizens. These measures ensure the sustainable development of the real estate market and help maintain a balance between supply and demand, especially amid rapid urbanization and increasing housing needs.
In summary, with support from the government and international organizations, coupled with the growth of the middle class and Proptech, Indonesia’s real estate market is on track for robust and sustainable development. Strict management policies help maintain stability and create favorable conditions for both domestic and international investors.
II. Current State of Real Estate Development in Vietnam
1. Development Status
In the first half of 2023, Vietnam’s real estate market experienced significant fluctuations. According to the Vietnam Real Estate Research Institute, the proportion of real estate in the economy’s total assets is expected to account for approximately 21.2% (equivalent to USD 462.7 billion) in 2025 and increase to 22.0% in 2030, reaching a value of USD 1,232.29 billion out of a total of USD 5,601.31 billion.
The real estate and construction sectors have made significant contributions to GDP, with real estate accounting for about 3.6% and construction about 10.6% in 2022. The total market capitalization of the sector is estimated at around VND 1.7-1.8 quadrillion, contributing 11% to total budget revenue, with real estate accounting for 4.5%.
Despite facing numerous challenges, real estate remains a potential and long-term investment channel. Urbanization and urban economic growth have driven housing demand and real estate development in major cities, while Vietnam’s urbanization rate increased from 30.5% in 2010 to nearly 40% in 2020, with an annual growth rate of approximately 2.75%.
According to the Ministry of Construction, foreign direct investment (FDI) in the real estate sector reached USD 4.45 billion in 2022, up 70% compared to 2021. As of July 12, 2023, total FDI in this sector reached USD 67.161 billion. Ho Chi Minh City leads in attracting FDI, with total registered capital reaching USD 16.3 billion, followed by Hanoi, Binh Duong, and Ba Ria – Vung Tau. Singapore is the leading investment partner, with USD 19.1 billion, followed by South Korea, the British Virgin Islands, and Japan.
These figures confirm that Vietnam’s real estate market is attracting strong interest from international investors, especially in the industrial real estate segment and large projects.
According to the National Housing Development Strategy for the 2021-2030 period, the average housing floor area per capita is expected to reach approximately 27m² by 2025 and 30m² by 2030. However, the current figure is only about 25.6m². Although 3,823 housing projects have been approved, the housing supply still does not meet demand, particularly in the social housing and low-income housing segments.
In the first half of 2023, the residential real estate market saw a sharp decline in supply, with only 25 completed projects providing about 10,000 apartments, reaching 50% compared to the last six months of 2022. Projects eligible to sell future-formed housing also only reached 37.5% compared to 2022, creating a significant shortage.
However, the government has launched the “Investment in Building at Least 01 Million Social Housing Units” scheme, aiming to address the urgent need for social housing. By mid-2023, 41 social housing projects had been completed, with approximately 19,516 units, and 294 projects were under implementation, with 288,499 units.
The tourism and resort real estate segment is also facing difficulties, with the consumption of resort villas and townhouses decreasing by 5-6% compared to the end of 2022 due to high-interest rate pressures and difficulties in accessing capital.
Conversely, the industrial real estate segment is a bright spot in the market. The occupancy rate in industrial zones in Ho Chi Minh City, Dong Nai, and Bac Ninh remains high (87-90%), with land rental prices increasing slightly by about 3% compared to the end of 2022. Many new industrial zone projects have been approved and implemented in the first half of 2023.
The Vietnamese real estate market continues to face several challenges related to legal and capital issues. Legal problems regarding land valuation, planning, and administrative delays have significantly impacted investor confidence and project progress. Difficulties in accessing loans with high-interest rates (up to 11-12% per year) have further increased the burden on real estate businesses.
However, the government has taken positive actions to alleviate market difficulties, including the issuance of Decree 08/2023 on corporate bonds and Resolution 33/2023 on solutions to promote real estate development. The State Bank has also implemented four reductions in operating interest rates, creating more favorable conditions for businesses to access credit.
It is expected that the Vietnamese real estate market will gradually recover from the second or third quarter of 2024, as legal reforms and supportive policies take effect. The social housing and industrial zones segments are expected to develop strongly if the “1 Million Social Housing Units” project is implemented on schedule. New real estate products will also emerge to meet the market’s increasingly diverse needs, while traditional segments such as residential and resort real estate will remain dominant.
Overall, despite short-term difficulties, the Vietnamese real estate market still shows long-term development potential, with reasonable reforms and policies from the government promising to create conditions for sustainable development.
2. New Development Cycle
The Vietnamese real estate market is entering a new development cycle with many challenges and opportunities. Although major issues such as supply-demand imbalance, unreasonable product structure, rising real estate prices despite difficulties, and financial and legal deadlocks persist, changes in policies and improvements from the government are creating conditions for market recovery.
Current Challenges:
– Supply-Demand Imbalance: Demand for housing, especially affordable housing, social housing, and worker housing, remains high, while supply is insufficient to meet it. This exacerbates the supply-demand asymmetry.
– Unreasonable Product Structure: The high-end housing segment accounts for a large proportion while the supply of affordable housing is severely lacking, leading to difficulties in accessing housing for low-income people.
– Rising Real Estate Prices: Despite market difficulties, real estate prices continue to rise, making home purchases more challenging for many people.
– Financial Deadlock: Businesses face difficulties in accessing finance and many restrictions in issuing bonds, weakening their ability to deploy real estate projects.
3. Recovery Prospects
However, in the first half of 2024, the market has shown positive signs of recovery. Both total supply and demand, along with microeconomic and macroeconomic factors, are showing improvement.
The demand for investment in the real estate market remains high, especially in segments such as apartments, industrial real estate, and commercial real estate. Industrial real estate continues to grow, while the commercial real estate segment is also receiving positive signals.
Factors Driving the New Development Cycle
New government policies, including the enactment of three important laws – the 2023 Law on Housing, the 2023 Law on Real Estate Business, and the 2024 Law on Land, will create a solid legal foundation to promote the real estate market.
These new regulations aim to remove legal obstacles, improve access to the land market, and encourage social housing development. In particular, the promotion of credit policies with preferential interest rates will make it easier for people to buy houses, thereby stimulating market demand.
Expectations for the Coming Period
It is anticipated that from the second and third quarters of 2024, the real estate market will return to a new normal state. Supply will continue to increase, especially for social housing and worker housing projects under the 1 Million Social Housing Units scheme. Additionally, retail, industrial, and condotel real estate segments are forecasted to show stronger growth signals.
However, the recovery process remains distinctly divided between segments. While the apartment and industrial real estate segments are experiencing rapid recovery, the tourism and resort real estate segment still faces many short-term difficulties due to legal issues and weak demand.
Overall, the new development cycle of Vietnam’s real estate market is gradually taking shape with the active participation of the government, businesses, and investors. New policies and laws are expected to create a transparent and robust legal foundation, helping the market develop healthily and sustainably in the coming years.
III. Lessons Learned and Key Recommendations for Vietnam
1. Lessons Learned
– First, the necessity of a transparent and effective legal framework.
From countries such as the United States and Australia, it is evident that a transparent and clear legal framework is a solid foundation for the sustainable development of the real estate market. The United States has established a real estate management system with strict federal and state laws, ensuring all transactions are transparent and fair through the Multiple Listing Service (MLS) system. In Australia, the government also implements public bidding mechanisms to ensure transparency in real estate transactions.
For Vietnam, it is necessary to adopt these lessons by building a stricter legal framework to manage and regulate the market while creating conditions for citizens and investors to easily access the land market.
– Second, price control policies and risk management.
Vietnam can learn from countries such as the United States and China on how to control real estate prices to avoid bubbles and minimize speculative risks.
In China, the government has implemented strict price control measures and real estate taxation to mitigate risks. These policies not only help stabilize real estate prices but also ensure the market’s sustainable development.
Vietnam needs to apply similar measures, particularly by establishing price control mechanisms and minimizing speculation, thereby keeping the market stable and enhancing its stability.
– Third, development of social housing and access to housing for all social strata.
An important lesson for Vietnam is from developed countries where social housing development is considered an indispensable part of real estate policy. In the United Kingdom, housing associations play a key role in providing social housing for low-income individuals and vulnerable groups. The government also implements low-interest loan programs to facilitate access to housing for citizens.
For Vietnam, developing support policies for low-income housing, along with the implementation of social housing projects, will help address housing shortages and ensure that all social classes have the opportunity to own homes.
– Fourth, development of comprehensive and long-term infrastructure.
One of the important lessons from developed countries is the importance of planning and developing infrastructure alongside the real estate market.
Countries such as the United States and Australia have focused on building transportation, electricity, water, and telecommunications infrastructure before implementing large real estate projects. In China, the government has long-term plans to develop industrial and urban areas associated with modern infrastructure, ensuring sustainable growth.
For Vietnam, investing in infrastructure development should be prioritized to reduce pressure on major cities while developing suburban and satellite urban areas.
– Fifth, enhancing market oversight and management.
Another lesson from developed countries is the enhancement of oversight and strict management of the real estate market. In these countries, governments regularly inspect and monitor buying and selling activities to promptly identify and address violations, speculation, and fraud. Both China and the United States have implemented strong measures to oversee the market, ensuring transparency and fairness for homebuyers.
Vietnam can learn from these practices and build more effective monitoring mechanisms, particularly by applying digital technology in market management and oversight.
– Sixth, supporting housing development for workers and laborers.
In addition to developing social housing, countries like Singapore and China have focused on housing development for workers and laborers. This group has very high demand but is often overlooked in housing planning. China has implemented many support policies for workers in industrial zones by constructing affordable and long-term rental housing projects.
Vietnam needs to adopt these models to meet the increasing demand of migrant workers and industrial zones.
– Seventh, developing flexible real estate financial instruments.
An important lesson from the United States is the development of flexible financial instruments such as Real Estate Investment Trusts (REITs), which allow people to invest in the real estate market without needing to own physical assets.
In Vietnam, the development of such financial instruments could help increase market liquidity and create more accessible conditions for both citizens and investors to participate in this field.
2. Recommendations
Given the challenges facing the real estate market in Vietnam regarding supply and demand, legal mechanisms, and sustainable development, it is crucial to draw lessons and propose specific measures to promote this market.
Based on international experience and domestic analysis, the following are recommendations to assist state management agencies and stakeholders in effectively, transparently, and sustainably developing the Vietnamese real estate market.
2.1. Recommendations for State Management Agencies
First, completing and synchronizing the legal framework.
– It is necessary to improve the Land Law, the Housing Law, and the Real Estate Business Law to enhance transparency and efficiency in land and real estate management.
– Establish clear regulations on land ownership, especially concerning the issuance of land use right certificates and property ownership on land.
– Implement legal mechanisms to control financial risks, particularly the issuance of bonds and capital mobilization in the real estate sector. This ensures a healthy and stable investment capital source for the market.
Second, managing and controlling market prices.
– Strengthen the control and regulation of real estate prices to avoid speculation and housing bubbles. Higher real estate taxes can be applied to short-term transactions or inefficient land use.
– Develop land price control mechanisms and create reasonable pricing policies to mitigate the risk of uncontrolled land price increases in high-demand areas.
Third, promoting social housing development.
– Intensify policies supporting the development of social housing, affordable housing, and worker housing in industrial zones. Management agencies need to create legal conditions and financial incentives to encourage businesses to invest in this sector.
– Increase the use of public land funds for social housing development, ensuring sufficient housing supply for low and middle-income people.
Fourth, boosting investment in infrastructure.
– Integrate urban development planning with modern transportation infrastructure, thereby promoting real estate development in suburban and satellite areas of major cities.
– Facilitate infrastructure investment projects such as highways, metro lines, clean water systems, and public works, helping attract investment in real estate in potential areas.
Fifth, enhancing oversight and transparency in real estate transactions.
– Develop a national land database to transparently track and manage all real estate transactions, thereby ensuring strict oversight and minimizing abuse and fraud in transactions.
2.2. Recommendations for Stakeholders (Enterprises, Investors, and Citizens)
For real estate development enterprises:
– Intensify investment in housing segments that meet market demand, especially affordable housing and social housing for low-income people.
– Enhance transparency and professionalism in business operations. Ensure that buying, selling, and transferring transactions are conducted in accordance with legal regulations, thereby building trust with citizens and investors.
– Apply sustainable development solutions, including building to green standards, protecting the environment, and efficiently using resources.
For investors:
– Increase the analysis and assessment of risks before deciding to invest in the real estate market. Investors need to have a long-term perspective, avoiding speculation and short-term investments that do not bring sustainable value.
– Provide financial support and collaborate with enterprises developing social housing, creating opportunities for low-income groups to access housing.
For citizens and customers:
– Actively seek information about the real estate market and related legal regulations to ensure rights during the buying, renting, and owning process of real estate.
– Participate in financial support programs and preferential loan packages from banks to access housing suitable for family needs and financial capability.
IV. Conclusion
The real estate market in Vietnam is facing a significant opportunity for transformation and sustainable development. However, to achieve this, it is essential to learn from successful international experiences in managing and regulating the real estate market.
Transparency and efficiency in the legal framework, reasonable land ownership policies, risk control, and social housing development will play vital roles in ensuring market stability and growth.
With close coordination between state management agencies and stakeholders, along with strong policy and legal reforms, Vietnam can create a new development cycle for the real estate market, contributing positively to the economy and society.
References
- Ho Huong (2020), Concerns about the real estate bubble, Dai Doan Ket, accessed October 11, 2019, from (https://daidoanket.vn/lo-ngai-bong-bong-bat-dong-san-10168132.html).
- Le, A. (2020), Forecasting Vietnam’s real estate market recovery support, Communist Party of Vietnam Online Newspaper, accessed October 13, 2019, from (https://dangcongsan.vn/cung-ban-luan/du-bao-thi-truong-bat-dong-san-phai-chang-duoc-tiep-suc-de-phuc-hoi-564964.html).
- Tran Kim Chung (n.d.), Real estate market development policies: international experience and lessons for Vietnam, accessed August 30, 2024, from (https://khoahoc.neu.edu.vn/Resources/Docs/SubDomain/khoahoc/h%E1%BB%99i%20th%E1%BA%A3o/qu%E1%BB%91c%20gia/2024/T%C3%80I%20LI%E1%BB%86U%20PH%E1%BB%A4C%20V%E1%BB%A4%20H%E1%BB%98I%20TH%E1%BA%A2O%20KHOA%20H%E1%BB%8CC%20QU%E1%BB%90C%20GIA%20(8-10-2024).pdf).
- Lucy Nguyen (n.d.), Lessons from China for Vietnam’s real estate market, accessed August 30, 2024, from (https://chodat.com.vn/tin-tuc/bai-hoc-tu-trung-quoc-cho-thi-truong-bat-dong-san-viet-nam).
- Central Executive Committee of the Party. (2022), Resolution No. 18-NQ/TW, dated June 16, 2022, on continuing to innovate, perfect institutions, policies, improve effectiveness, and efficiency of land management and use, creating momentum to turn our country into a high-income developed country.
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