PM calls for safe, healthy development of real estate market

Prime Minister Phạm Minh Chính underlined the need to remove “bottlenecks” in the real estate market while chairing an online conference on July 14 on measures to ensure safe, healthy and sustainable development of the property market.

HÀ NỘI — Prime Minister Phạm Minh Chính underlined the need to remove “bottlenecks” in the real estate market while chairing an online conference on Thursday on measures to ensure safe, healthy and sustainable development of the property market.

The conference was connected with the People’s Committees of five centrally-run cities of Hà Nội, HCM City, Đà Nẵng, Hải Phòng, and Cần Thơ.

In his remarks at the event, the PM emphasised the viewpoint of persistently and firmly developing a safe, healthy and sustainable real estate ecosystem without unreasonable credit tightening but strengthening inspection and supervision and State management.

Economic-civil relations will not be criminalised, but legal violations will be severely punished to protect those who adhere to the law and protect and harmonise the interests of the State, businesses and people, he stated.

Pointing out shortcomings, limitations and inadequacies of the market, the PM asked ministries, sectors and localities to create a healthy environment for the property market, with priority given to the market segment serving social security. He said market rules should be respected but the State should uphold its management role to prevent manipulation of the market.

The Government leader underlined the need to promote strategic infrastructure development, thus creating new development space and motivation for the real estate market.

He assigned the Ministry of Construction to research and fine-tune the legal system related to real estate with a view to removing obstacles and facilitating the sector’s stable and healthy development. The ministry should quickly submit to the National Assembly for consideration and approval the Housing Law (revised) and the Law on Real Estate Business (revised) to create a legal framework for real estate trading and enhance the effectiveness of management of the property market.

The ministry was also told to report to the PM on the real estate market every quarter.

The State Bank of Vietnam (SBV) was tasked with monitoring, controlling and restructuring credit for the real estate sector to ensure proper use of capital and prevent risks to the market.

The PM required the Ministry of Natural Resources and Environment to coordinate with the Ministry of Finance and the Ministry of Justice to study, review and amend current law provisions related to the auction of land use rights in order to ensure consistency and suitability with reality.

The agencies were also requested to strengthen inspection and examination, and coordinate with localities to detect, stop and strictly handle violations in land use right auction activities.

PM Chính assigned the Government Office to coordinate with the Ministry of Construction and related ministries and sectors to compile a Prime Minister’s directive on solutions to ensure the healthy and sustainable development of the real estate market.

A report by the Ministry of Construction said the real estate market contributed 4.5 per cent to GDP both directly and indirectly. The sector fell into difficulties in 2021 due to the pandemic, but it has joined the trend of recovery from early 2022.

The ministry was of the view that the legal system related to real estate investment, building and trade has revealed some flaws that call for correction. Property prices have risen too high compared to people’s incomes.

Participants focused on assessing and forecasting Việt Nam’s real estate market, proposing orientations and solutions on product structure and supply for the safe, healthy and sustainable development of the market.

Macro policy and the impact of land policy on the real estate market; the impact and influence of the capital and stock markets and policies related to the auction and valuation of land use rights on the real estate market were also put on the table. — VNS

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Office, industrial, and project development land account for 39%, 35%, and 26% of the total invested capital, respectively.

While the region’s more developed economies are facing a slow-down, Vietnam’s GDP reached a new height in 11 years, reaching 7,72% in Q2 2022. The country saw a record US$10.06 billion in foreign direct investment distributed in Vietnam for the first half of the year, marking the highest growth in 5 years. Real estate ranked second among the most invested sectors, accounting for 26% of total inflows. Investors from Singapore, South Korea, Denmark, China, and Japan were the leaders in the amount invested in Vietnam.

Contradictions between provisions in the legal system on investment are eliminated, as issues relating to the property market like investment activities, and legal procedures relating to the legal system are gradually completed. This will also remove the existing hurdles for M&A activities this year. Recently, the Central Executive Committee issued Resolution 18 of the Central Committee with important new guiding points on the requirement to increase marketability, transparency, and efficiency in state management of land. Once institutionalized and practically implemented, it is expected to bring great multi-faceted impacts to Vietnam’s real estate market in the coming time.


The office M&A market heated up with the acquisition of Capital Place, by Viva Land from CapitaLand Development. The property is a grade-A office building located in the center of Hanoi, with a price of US$550 million. This high-end property feature a pair of twin 37-story towers and is headquarters to many MNCs in Hanoi.

Not long before this, Viva Land completed an acquisition for the Saigon One Tower and changed its name to IFC One Saigon. The project is located in the heart of district 1, HCMC, and is set to become an integrated office, apartments, and shopping mall property with a total floor area of 124.100 sqm.

The housing market also witnessed a series of “blockbuster” deals this year. Novaland Group acquired the Kenton Node project from Tai Nguyen Construction Production Trading Co., Ltd. This is a luxury apartment project in Phuoc Kien, Nha Be District, HCMC. Post-acquisition, the project will be known as Grand Sentosa and supply the Saigon South market with a total of 1,640 luxury apartments.

Another notable deal is Masterise Home acquiring the Saigon Binh An project, which from now will be known as The Global City. With an area of 117 hectares, the project is within proximity to the Saigon Sports City complex and Long Thanh – Dau Giay highway.

Just recently, the global private equity firm Warburg Pincus announced a US$250 million investment into Novaland, to increase land funds and develop existing projects in strategic locations, taking advantage of the gradually improving infrastructure in the South. Two other private investment funds VinaCapital and Dragon Capital also announced the investment of US$103 million in Hung Thinh Land Joint Stock Company.

The hottest sector remains to be industrial, with 35% of total invested capital and many notable deals.

On January 21, the year started with a bang as the Vietnamese property market saw an announcement from GLP to establish GLP Vietnam Development Partners I with an investment total of US$1.1 billion, with six development sites with a total land area of close to 900.000 sqm. GLP is a leading global investment manager and business builder in logistics, data infrastructure, and renewable energy.

In February, BW Industrial Development Joint Stock Company, Vietnam’s leading new industrial and new real estate developer co-founded by Warburg Pincus and Becamex IDC, announced the acquisition of approximately 74,000 sqm of land in Bac Tien Phong Industrial Park in Quang Ninh Province, developed by DEEP C.

CapitaLand Development also announced the signing of a memorandum of understanding with the People’s Committee of Bac Giang province. The two will partner for the development of an urban – industrial – logistics project with a total area of more than 400 hectares across the province, with an investment commitment of US$1 billion (equivalent to VND22,700 billion).

The recent notable deals also include Boustead Projects Co., Ltd. acquiring a 49% stake in KTG & Boustead Logistics Industry Joint Stock Company in Yen Phong Industrial Park in Bac Ninh Province for US$6.9 million.

Apart from traditional real estate transactions, in June, Hong Kong-based private investment firm Gaw Capital Partners announced an investment into a Tier 3 Data Center project, with an area of 6,056 sqm located in District 3 High-tech Ho Chi Minh City.

Trang Bui, Country Head of Cushman & Wakefield, commented: “The Vietnam real estate market has been attracting great attention from foreign investors, especially for profitable projects. The growth of private equity funds has also supplied a large source of investment for M&A transactions. These investors are constantly looking for active properties or looking to enter into joint ventures with reputable partners. For domestic investors, the purchase of land for project development is of higher priority. Every sector of the property market is gaining attention from investors. That being said, we believe that residential and industrial will be the most attractive sectors for investors and developers from HCMC, Hanoi, and neighboring provinces.”

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The Housing Unaffordability Crisis in Asia

The poor and middle class are struggling to find affordable housing across the region, but there are some basic steps cities can take to improve the situation.


Cities in developing countries all over Asia face a severe housing unaffordability crisis. Prices as a portion of income have reached levels that prevent most urban dwellers from realizing their dream of becoming a homeowner. And as cities continue to grow, that does not look set to change.

The consequences of the housing unaffordability crisis go beyond the individual household though and impact the entire economy. As housing becomes very expensive, people become reluctant to move and spend longer hours commuting. The city as an efficient labor market thus works less well.  It also means companies invest in real estate instead of more productive investments while banks favor firms that have large real estate portfolios instead of those with the best business models. High housing prices thus result in the misallocation of labor and capital and undermine the competitiveness of cities.

Over the past three decades Asia has experienced an urbanization rate unprecedented in human history. While the rapid urbanization helped to fuel economic growth, it has overwhelmed many cities, especially with respect to housing. While the demand for housing rapidly increased, the supply reacted slowly, resulting in high housing prices.

In an attempt to gauge the magnitude of the problem, ADB’s economic research team gathered housing price data for 211 cities in 27 developing countries in Asia. Combining the data with the income of households allowed us to calculate the price-to-income ratio, the most common measure for housing affordability. The average price-to-income ratio across all cities is at 15.8, which is classified as severely unaffordable. In developed countries the ratio stands at around 4. A further aggravating factor is that access to formal finance is still low in many Asian countries and housing finance expensive.

How to solve the housing crisis? First, better data means better policies. Housing price data are rarely collected systematically in cities. Policy makers therefore struggle to assess the magnitude of the problem and are unable to assess the impact of existing housing policies. Several governments in the region, including Malaysia and the Philippines, have recognized the need for better data and introduced new programs to systematically collect more information on the housing market. Rich data sources are also becoming available through new information technology developments and can offer relatively inexpensive options to improve the understanding of the housing and labor market.

Second, easing supply constraints will lower housing prices. Housing prices are high because the rapid increase in demand has met a sluggish supply response. One of the main reasons is that cities have been slow in providing new developable land at low cost. Rigid land use regulations and coordination problems across administrative boundaries often delay the process. In the best case, the provision of new land is linked to the increase of affordable housing. For example, in Singapore the government provides land parcels at lower prices to private developers to build affordable housing for the middle class.

Third, provide affordable and efficient public transportation. Recent research in the United States found that better transportation can substantially lower housing prices. An efficient and affordable within-city transportation system allows people to move quickly within the city and expands the potential area for commuting to jobs. It thereby alleviates the need to live in urban centers and eases the housing demand. Upgrading public transportation systems in cities in Asia would therefore not only ease the massive congestion problem, but also help reduce housing prices.

Finally, promote the rental market. The focus of housing policies has often been on enhancing homeownership. While homeownership offers certain advantages, such as the accumulation of a physical asset, it also carries risks, such as overborrowing and lower labor mobility. The rental market remains small in most Asian cities, especially for low-income groups. Developing a thriving rental market that offers a healthy mix of both public and private rental housing should therefore be encouraged. The public rental housing stock needs to be expanded and better managed. The participation of the private sector can be encouraged by providing financial incentives, such as tax exemptions or subsidies, for building private rental housing.

As cities in Asia continue to grow, they urgently need to tackle the housing unaffordability crisis. Housing unaffordability could undo many of the benefits that urbanization brings. As cities are the center of economic activity, unaffordable housing undermines the competitiveness of the entire economy and of sustainable development.

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At least 1 million housing units for low-income earners to be built by 2030

Prime Minister Pham Minh Chinh has asked the Ministry of Construction to work together with other ministries and agencies to draft and submit a plan on building at least 1 million apartments of social housing for workers and low-income earners by 2030 to the Government in August.

Hanoi (VNA) – Prime Minister Pham Minh Chinh has asked the Ministry of Construction to work together with other ministries and agencies to draft and submit a plan on building at least 1 million apartments of social housing for workers and low-income earners by 2030 to the Government in August.

The Government Office has released a notice on the PM’s conclusion at a conference on social housing development which took place earlier this month in Hanoi.

According to the document, hundreds of social housing projects have been completed, benefiting hundreds of thousands of low-income earners.

Developing social housing for workers and low-income earners forms an important part of the socio-economic development policy, and it is the responsibility of the State and society, PM Chinh affirmed.

The PM noted the State encourages economic sectors to develop social and affordable housing for workers under the market mechanism, and that it is also working to provide housing assistance for low-income earners in urban areas and workers in industrial parks, thereby helping to guarantee political stability and social security.

Developing social housing is a task of not only the Party and State but also the entire political system, businesses, and people, he emphasised.

Besides, it is also necessary to pay due attention to properly developing boarding houses and attracting investors, including foreign ones, to the building of social housing for workers and low-income earners.

Social housing development must be connected with the real estate market, adhere to localities’ housing development plans for each period as well as relevant laws, and have corresponding technical and social infrastructure built, the Government leader said.

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Vietnam, UN sign strategic framework for sustainable development cooperation

A Strategic Framework for Sustainable Development Cooperation (CF) between the Government of Vietnam and all UN resident and non-resident agencies in Vietnam for the 2022-2026 period was signed in Hanoi on August 11.

Hanoi (VNA) – A Strategic Framework for Sustainable Development Cooperation (CF) between the Government of Vietnam and all UN resident and non-resident agencies in Vietnam for the 2022-2026 period was signed in Hanoi on August 11.

Minister of Planning and Investment Nguyen Chi Dung, as assigned by Vietnamese Prime Minister Pham Minh Chinh, and UN Resident Coordinator in Vietnam Pauline Tamesis signed the document.

The Strategic Framework for Sustainable Development Cooperation 2022 – 2026 guides and steers the Government of Vietnam and the UN’s collaboration on accelerating progress to achieve the Sustainable Development Goals (SDGs). It highlights the joint commitment to deliver sustainable development for all.

Speaking at the signing ceremony, Dung said that the CF will be implemented at a time when Vietnam has strengthened its post-pandemic economic recovery, responded to climate change and transitioned to a green, circular economy. The Government has also been making efforts to improve institutions and policies in order to mobilise resources from all economic sectors to develop the country.

“Together with other development partners, the UN plays an important role in supporting Vietnam in its development, integration and strong participation in global development through policy advice to the Government, sharing Vietnam’s experience with developing countries and introducing international experience to ensure a sustainable, green growth economy that balances economic and social development,” he said.

The UN official affirmed that the principle of leaving no one behind runs through the CF as the fundamental commitment of the UN in Vietnam.

“Ensuring that no one is left behind requires a broad, whole-of-government and whole-of-society approach,” she said.

The Government of Vietnam has together with the United Nations outlined four key development outcomes, namely inclusive social development, climate change response, disaster resilience and environmental sustainability, shared prosperity through economic transformation and governance, and access to justice.

Of which, inclusive social development concentrates on inclusive, gender responsive, disability sensitive, equitable, affordable and quality social services and social protection, with the aim of helping people in Vietnam escape from poverty in all its dimensions and empowering people to reach their full potential.

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Why Vietnam’s Infrastructure is Crucial for Economic Growth

Vietnam currently spends 6 percent of its GDP on infrastructure while other countries in the region spend an average 2.3 percent, making Vietnam the leading country in ASEAN for infrastructure investment. However, experts maintain that Vietnam has a gap between its current infrastructure and its aspirations of being a fast-growing economy. Vietnam Briefing highlights key aspects of Vietnam’s infrastructure, current prospects, and government initiatives.

According to the most recent World Bank report, Vietnam is positioned 47th out of 160 countries in infrastructure rankings and 103rd in road quality as per the World Economic Forum’s ranking. As FDI pours into Vietnam, along with the government’s determination to implement Industry 4.0, the current state of infrastructure is unable to keep up.

Although Vietnam allocates up to 6 percent of GDP for infrastructure annually, 90 percent of that spending comes from the public budget, which has burdened the national debt and fiscal policy. Consequently, the government recently introduced public-private partnerships to scale up infrastructure upgrades. The country expects that 20 percent of investment in infrastructure will come from private funds in the incoming years, compared to only 10 percent in the past years.

As per the Global Infrastructure Hub, Vietnam needs on average US$25-30 billion annually for infrastructure if the country wants to ensure economic growth. However, the national budget can only allow for US$15-18 billion (at 7 percent of GDP). Therefore, the country has to source the remaining US$10-15 billion from private investors.

Vietnam Briefing explores key highlights of Vietnam’s infrastructure and opportunities where investors can tap in.

Transportation infrastructure

Vietnam’s road quality urgently needs improvement given that road transport is the backbone of the country’s logistics and transport industry. Only 20 percent of roads are paved with medium to low-quality materials that result in cracks and bumpy surfaces.

In 2021, the government issued of Decision No. 1454/QD-TTg which promotes the development of the road system for the 2021-2030 period, with a vision of 2050. The government aims to scale up the current 1,290 km of national highway to 5,000 km by 2030 while upgrading the road surfaces and increasing connections to major ports, airports, and railway stations. Especially, the ambitious 1,800 km HCMC-Hanoi highway is currently being constructed which will aid transport and goods movement throughout the country.

In terms of aviation, Vietnam has 22 airports (for civil use) out of which 12 are international and 10 domestic.  The Long Thanh International airport in Dong Nai which will eventually replace Ho Chi Minh City’s Tan Son Nhat International Airport is expected to be completed for the first phase in 2025.

Currently, only five of the 12 international airports are up to world-class standards, including Tan Son Nhat International Airport, the capital Hanoi’s Noi Bai International Airport, Ha Long’s Van Don International Airport, Phu Quoc’s Phu Quoc International Airport, and Da Nang’s Da Nang International Airport.

The government has targeted increasing the number of airports to 26 by 2030 and 30 by 2050. However, experts believe the target can be too ambitious and more attention should be paid to upgrading the capacity of current operating airports to meet tourism and logistic demand. Meanwhile, the government is also planning to divest from airports to attract more private investments. Van Don International Airport is a good example of a private airport with remarkable success.

Public transit

Regarding public transit, Vietnam finally put into operation the first metro line in Hanoi after more than a decade of construction while the first metro line in Ho Chi Minh City expected to be completed in Q3 2022, has been delayed until Q3 2023,

Hanoi expects to construct six metro lines while Ho Chi Minh City will have eight metro lines. The delays in the completion of metro lines in both cities are attributed to two main factors: ODA capital and management board inefficiency.

Since public transit projects like the metro are costly but with low returns on profits, it was challenging to source capital from private investments. Therefore, capital for the first two lines in Hanoi and Ho Chi Minh City are from ODA loans (official development assistance loans), which means the procedure must conform to both foreign and domestic investment laws apart from added bureaucracy and red tape.

The metro line construction was also met with difficulties in site clearance due to confusing directions from the management board.

As the current metro project is far behind plans, experts held that, for the remaining metro lines, the government should source private investments for simplified procedures and, at the same time, enhance the efficiency of the management board.

Regarding city buses, as of March 2022, Ho Chi Minh City recorded 100,000 rides per day, up 52 percent compared to the previous month. Due to worsening traffic congestion and pollution, more people are switching to public transit in big cities, indicating a need for alternative transportation such as ride-hailing cars and motorbikes, electric buses, and public bikes for rent.

Vingroup – Vietnam’s dominant conglomerate well-known for Vinfast electric cars, has also introduced its Vinbus model – electric buses, in Ho Chi Minh City. The model can be the stepping stone for future sustainable public transit though more will needed to be done.

Port infrastructure

Vietnam has 251 ports, with a total capacity of up to 543.7 million tons of cargo/per year. Concerning seaport infrastructure, Vietnam currently has 45 seaports: 2 seaports of class IA (international port); 12 seaports of class I (regional port); 18 seaports of II (local port); and 13 seaports of class III (oil and gas port).

Vietnam’s port infrastructure is currently a magnet of FDI, with large-scale investments from major shipping lines and joint-venture port companies globally. However, challenges remain for this industry as the current capacity has failed to meet soaring demand from import/export activities, indicating a call for greater investment to pour into this attractive sector.

Energy infrastructure

Vietnam is still dependent on coal and natural gas as the main sources of electricity. However, in 2021, the capacity of renewable energy ramped up, contributing to 15 percent of the national capacity, equivalent to 13.15 billion kWh.

The Politburo issued Decree No. 55-NQ/TW on the national energy development strategy by 2030, with a vision to 2045. The decree seeks to ramp up the renewable energy sector while keeping the energy supply in the country stable, to make Vietnam a leading country in ASEAN energy-wise. The estimated shares of energy sources in Vietnam as of 2021 are as follows:

Hydropower 25.9%
Coal 45.6%
Gas turbines 12.2%
Imported electricity 0.6%
Renewable energy 15.4%
Others 0.3%

Vietnam set the following goals for the energy sector by 2030:

Primary energy capacity 175-195 million tons of oil equivalent (TOE)
Total capacity 125-130 GW
Contribution of renewable energy to the primary energy capacity Up to 20%
Total energy consumption 105-115 TOE
Ranking in ASEAN for energy capacity Top 4
Liquefied natural gas (LNG) importation 8 billion cubic meters

Telecommunications infrastructure

The telecoms sector in Vietnam is undergoing significant transition in light of Vietnam’s digital transformation, coupled with the effects of the pandemic that has ramped up demand for digital services.

The telecoms network coverage has already reached 100 percent of communal-level localities and 2G, 3G, and 4G coverage is prevalent for 99.8 percent of the population. In addition, 5G has also been piloted in 16 localities while the IPv6 user rate had reached 50 percent by June 2022, making Vietnam the 10th country worldwide in IPv6 user rate.

Manufacturing infrastructure

Vietnam’s determination to become one of the world’s manufacturing hubs is evident in its 20-year goal: becoming a developed country with upgraded industrial infrastructure and lower-middle income by 2025; a developed country with modernized industrial infrastructure and upper-middle income by 2030; and a developed country with wealthy citizens by 2045.

There are three industrial zones across the country:

  • Northern region: There are 125 industrial parks across 21 provinces, chief among them include Song Khe – Noi Hoang Industrial Park, Luong Son Industrial Park, Mai Son Industrial Park, Luong Son Industrial Park, and Song Cong Industrial Park;
  • Central region: There are 56 industrial parks across 11 provinces, chief among them include Bim Son Industrial Park, Lam Son Industrial Park, and Cua Lo Industrial Park; and
  • Southern region: Northern region is the main hub for manufacturing in Vietnam, with up to 183 industrial parks across 19 provinces. Chief among them include Sonadezi Chau Duc Industrial Park, Hiep Phuoc Industrial Park, and Tan Phu Trung Industrial Park.

Currently, most of Vietnam’s industrial parks are highly rated with cutting-edge technology and ready-built infrastructure with high productivity. Vietnam attracts substantial FDI into industrial zones, from Asian investors in Japan and South Korea to Western investors in Germany and the US, thereby enjoying the expertise in technology that foreign companies offer.

Manufacturers in Vietnam are increasingly adopting artificial intelligence and 3D model printing into their products while the government is making plans to upgrade the transportation infrastructure around industrial zones to boost logistics and attract FDI.

Despite positive signs, the rate at which industrial infrastructure grows still falls short. Up to 17 percent of German companies investing in Vietnam stated that the current infrastructure is a big challenge for them as high technologies and automation, although increasingly adopted in factories, have yet to be applied on a large scale. Many factories are still labor-dependent instead of being automated and technology-based.


Infrastructure is a key driver behind Vietnam’s economic growth and FDI. Although infrastructure in transportation and manufacturing has seen some major improvements and efforts from the government, many projects are still not time-efficient and high technologies have yet to be transferred and applied on a large scale. However, with the growth of FTAs, preferential investment policies, and strong determination of the government, Vietnam’s infrastructure is likely to further improve significantly while also presenting opportunities for investors.

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