A building near Bến Thành Market in downtown HCM City whose construction stopped at the end of last year. The property market slump is expected to continue until the end of 2024. — VNS Photo Bồ Xuân Hiệp

HCM CITY — Despite the Government’s efforts to address them, the challenges for the property market will continue until the end of next year, experts have warned.

Speaking at a forum late last week, Nguyễn Văn Đính, chairman of the Việt Nam Real Estate Brokers Association, said the market would continue to struggle with limit ed access to capital, legal bottlenecks and companies’ inability to redeem bonds.

A recent survey by his association found over 70 per cent of businesses saying Government policies aimed at resolving funding difficulties have not been effective, he said.

Real estate transactions have plummeted by 90 per cent in 2022-23, indicating weak market demand, he said.

Even after almost five months since its announcement, the Government’s VNĐ120 trillion credit package has remained untouched.

Đính blamed this on many projects facing obstacles caused by local authorities lacking mechanisms and determination to resolve difficulties.

Hoàng Hải, director of the Department of Housing and Real Estate Market Management, said a number of housing projects are facing delays or suspension due to legal obstacles.

This has led to a sharp decrease in supply and liquidity, further affecting the real estate market, he said.

Nguyễn Quốc Hiệp, chairman of Việt Nam Construction Contractors Association, said 70 per cent of the obstacles stem from legal issues, particularly the overlapping of laws.

Economist Lê Xuân Nghĩa said the weak domestic demand and slow recovery suggest a U-shaped rebound in the economy rather than a V-shaped one, leading to liquidity difficulties in many sectors.

Recommendations

To help the market recover and develop sustainably, experts recommended increasing the supply of affordable housing.

Deputy Chairman of the Việt Nam Real Estate Brokers Association Đính said the market has faced unprecedented problems in the past five years with a large inventory and big drop in liquidity.

To address the imbalance between supply and demand, property developers should focus on affordable housing and social housing projects, he added.

Economist Lê Xuân Nghĩa said it is vital to issue specific regulations to implement the VNĐ120 trillion support package for financing social and workers’ housing projects.

Businesses also need support to develop affordable housing and overcome factors that discourage them, he added.

Dr Trần Đình Thiên, a member of the Prime Minister’s Economic Advisory Group, said it is essential to restore the trust of investors, businesses and consumers.

He also called for more Government support measures to revive the market.