In early 2022, real estate witnessed ‘land fever’ in some localities after information spread about infrastructure development, Industrial Zones, and road and bridge projects. But in mid-2022, the situation turned around.

In a report reviewing the market situation in 2022 and discussing the implementation of the tasks in 2023, the Ministry of Construction (MOC) pointed out that there are still risks in the market, which shifted from a real estate bubble to a recession risk.

There is a supply shortage in some market segments and the product structure is not suited to market demand, with a serious shortage of social housing and low-cost housing products.

Meanwhile, analysts are more optimistic about market performance in 2023 as good signs have appeared. 

In late 2022, State Bank of Vietnam (SBV) decided to raise the targeted credit growth rate by 1.5-2 percent. This means that VND240 trillion more will be pumped into the economy, which is good news for the sluggish real estate market.

BIDV’s Chief Economist Can Van Luc said the decision would increase public and investor confidence. Investments will help to stimulate other cash flows as well.

The HCM City Real Estate Association (HOREA) chair Le Hoang Chau said the additional capital will have spillover effects on the corporate bond market, helping overcome difficulties. This will ease the burden on credit institutions and allow institutions to focus on their major function of providing working capital to the economy.

However, only 30 percent of short-term capital should be used for medium- and long-term loans under the SBV-initiated roadmap on gradual reduction of credit into risky fields such as securities and real estate.

In November, the Prime Minister set up a task force in charge of removing problems during real estate project implementation.

Then on December 14, the Prime Minister released a document on removing difficulties in the real estate market and developing housing products.

Most recently, on Jan 6, the Prime Minister signed the government’s No1 resolution on the orientation for socio-economic development in 2023, which includes policies to deal with the problems of the real estate market.

Social housing is expected to be a bright spot in the real estate picture, helping the market to recover in 2023.

In 2022, MOC submitted to the Prime Minister a plan on building at least 1 million social housing apartments for low-income earners and factory workers in the 2021-2030 period.

Anh Phuong