The stagnation of the real estate market has a great impact on the urban economy

The stagnation of the real estate market has a great impact on the urban economy

 The stagnation of the real estate market has a great impact on the urban economy

Over the past 50 years, the world's economic crises have started from the real estate market crisis and then spread to the financial market...


Illustrated photo.

At the seminar "Remove obstacles and promote investment in real estate" organized by the Investment and Trade Promotion Center of Ho Chi Minh City (ITPC) in collaboration with the Vietnam International Arbitration Center (VIAC) On May 27, 2022, experts all said that it is necessary to quickly remove the "bottlenecks" of the real estate market so as not to spread to other markets.


DON'T LET THE REAL ESTATE CRISIS HAPPEN

Speaking at the seminar, Dr. Tran Du Lich, Vice President of VIAC, said that over the past 20 years, the real estate market has made great contributions to the process of urbanization, industrial infrastructure development, etc. 


However, the real estate market also has defects and distortions. Recently, the connection between the financial market and the non-transparent real estate market has created great risks. Therefore, the State is correcting and healthyizing these two markets. It can be said that the financial market and the real estate market are two sides of the same coin.


Regarding cash flow, in which real estate credit tightening is aiming for some effect? Regardless of how credit is adjusted, the State Bank must do so that housing real estate projects, industrial parks ... are operating well, they still have to inject capital to complete the project. The problem is that the capital flow must be to the right address, not equal.


"The economic crises in the world over the past 50 years all started from the real estate market crisis and then spread to the financial market... The trend is to make both these markets healthy. If the real estate market stagnates, it will have a huge impact on economic development, especially on the urban economy," Lich emphasized.


According to Mr. Le Hoang Chau, Chairman of HoERA: "How to make the real estate market like a swallow, achieve the goal of transparency, health, sustainable and stable development" - Photo: PC.

 Recognizing more about the importance of the real estate market, Mr. Le Hoang Chau, Chairman of Ho Chi Minh City Real Estate Association (HoREA), said that in Vietnam, real estate currently accounts for 25% of GDP, if calculated. full. In China, data on the real estate market has three figures: 16%, 20% and 24% of GDP. From here, it can be seen that the contribution of real estate to the economy is very large.


“The real estate market is like two birds. When it is a Swallow, it signals spring, which means that the real estate market is developing stably, or recovering and will lead to the recovery of the economy. But when it is a storm bird, it means that the real estate market is in crisis, leading to a crisis in the economy. 

Therefore, what must be done to make the real estate market like a swallow, achieve the goal of transparency, health, sustainable and stable development," said Mr. Chau.
And Dr. Can Van Luc, a member of the National Monetary and Policy Advisory Council, chief economist at BIDV (HM: BID), said that the real estate market involves at least 40 industries, such as: construction (6% of GDP), tourism, catering, finance and banking (7% of GDP)... This is also a market that strongly attracts FDI inflows. Particularly in the first 4 months of 2022, the total newly registered FDI capital into real estate reached nearly 2.8 billion USD, ranked second, accounting for 26.5%, capital contribution to buy shares more than 1 billion USD, accounting for 9.7 %.

According to data from the State Bank of Vietnam, the current credit for real estate is about 2.23 million billion VND, of which, housing loans are estimated at 65% (1.45 million billion VND), the remaining 35% is real estate credit.
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