I. Overview of real estate market
The real estate market is considered as one of markets playing the important position and role in the national economy, having direct connections with monetary financial market, construction market, building materials market, labour market…Developing and managing effectively this market will contribute largely to speed up the process of social-economic development, create possibilities for investment capital attraction, have a practical part in the durable rural and urban development in conformity with the country’s industrialization and modernization.
1. General view of real estate and real estate market
* General view of real estate
The real estate are not only lands, riches in the entrails of the earth but also everything being made by human work and closely connected with lands such as construction works, plants…The real estate have different characteristics from those of the other goods such as the fixity, the particularity, the scarcity, the durability…
* General view of real estate market
- Definition of real estate market
The real estate market is defined as where real estate buyers and sellers deal with each other.
- Classification of real estate market
+ Relying on real estate uses: land market, housing market, commercial and service work market…
+ Relying on kind of activities: real estate trading and transfer market, real estate leasing market…
+ Relying on areas: urban real estate market, rural real estate market…
+ Relying on real estate’s order of joining the market: primary market and secondary market
+ Relying on level of control: formal market and informal market
- Structure of real estate market
The real estate market includes: sellers, buyers and service organizations supporting the market (real estate transaction centres, brokerage, valuation, advertising, legal consultancy…).
2. Relations between real estate market and other markets in the economy
The real estate market is an important market in the economy, and connects closely with the other markets, namely: building materials market, labour market, scientific and technological market, especially monetary and financial market. In developed countries, 1 USD of investment increasing in the real estate sector will help the other economic sectors to grow by 1.5-2 USD.
3. Rules of real estate market
The real estate market has the following three rules: (i) rule of real estate market’s cycle, (ii) rule of supply and demand, (iii) rule of prices.
4. Development levels of real estate market
In almost all countries having the market economy, the real estate market takes form and develops through 4 levels: beginning, centralization, monetization, and financialization.
5. Roles of real estate market
* The real estate market is one of the important markets in the economy as this market is directly related to an enormous volume of properties in terms of scale, nature, as well as value in the national economy.
* Real estate market’s development contributes to mobilize the interior capital sources
* Developing and managing efficiently the real estate market, especially land use right market, is the important condition to exploit effectively the precious property belonging to the whole population’s ownership whose owner representative is State
* Developing and managing efficiently the real estate market will contribute to stimulate the development of production, increase the budget
* Developing and managing efficiently the real estate market will satisfy the pressing demand in terms of housing of the urban and rural population
II. Experiences in managing and developing the real estate market of some countries in the world
1. The Government takes part in investing and supplying a range of real estate goods that the other economic agents do not participate in, such as: low income housing, social housing…in order to stabilize the market.
2. It is necessary to build the housing financial system such as the housing saving fund in order to support the majority of workers establishing their houses
3. Regulating land rent differences due to State’s investment and construction of technical infrastructure in order to equalize the advantages in the real estate market, in the same time, coordinating the infrastructure development and urban development in the way of “having both road and street”.
4. It is needed to forecast the market to have orientations of development, manage and develop solidly the market, prevent changes affecting the national economy.
5. Controlling the foreign investment into the real estate sector
III. Situation of Vietnam’s real estate market
1. Development process of Vietnam’s real estate market in the last 10 years
* The fever on the real estate market blew up from the end of 2001 to the end of 2003. Since the Land Law 2003 became effective, the real estate market came into the stage of recession for the period 2004-2006. From the end of 2007 to March 2008, the real estate market recovered and grew strongly in several big cities, due to the fact that a great number of investors shifted from the stock market to the real estate market. From March 2008 to June 2008, the real estate market declined sharply in terms of prices and transaction number. It is because the hot growth of the real estate market levelled of due to: limited proportion of real estate loan, too high lending interest rate…
2. Advantages of the real estate market
* Development of real estate market contributes to the economic development
* Development of real estate market satisfies step by step the housing demand of the population and contributes to the rural and urban development in the civilized, modern and durable way.
* Development of real estate market attracts a great number of domestic and foreign investment capitals into investing and developing the real estate, especially the housing, contributes largely to the economic development of the country and increases receipts for the budget.
* The structure of real estate market is improved step by step; the market develops soundly and solidly.
* Through the real functioning of real estate market, the law system is gradually improved; the state administration and the market economy institution are increasingly improved to be suitable with the requirement of development and integration.
3. Forecast on the demand of Vietnam’s real estate market
* Forecast on the demand of housing and urban development
* Forecast on the demand of real estate in developing the industry
* Forecast on the demand of real estate in developing the commerce
* Forecast on the demand of real estate in the hotel sector
* Forecast on development potentialities of low price housing market
4. Problems and inconveniences
The real estate are an important factor in any economies, however, it is argued that we should not put an excessive number of national resources into this sector. The real estate market in Vietnam has inconveniences concerning the legal framework and the subjects taking part in the market.
5. Solutions to develop the real estate market
* General points of view
- Ensuring that the right of land use can be favourably converted into commodity
- Ensuring the harmonization of benefits between the State, people having demand of real estate and investors.
- Improving the real estate market in terms of institution, structure and functioning organization.
* Several orientations and solutions
- Firstly, strengthening the reorganization of the primary real estate market
- Secondly, developing the financial canals of real estate
- Thirdly, solving the problems concerning tax and cost in the real estate sector
- Fourthly, setting up a number of solutions to manage the real estate market
+ Establishing systems specialized in managing and developing the real estate market
+ Reinforcing to verify and control the progress of works being approved
+ Ensuring the openness and the clearness of real estate transactions
- Fifthly, improving the institutional environment of real estate market.