Dr. Tran Xuan Luong: Real estate businesses lacking resources will be eliminated from the game

DNHN - Dr. Tran Xuan Luong believes that real estate businesses that lack resources and strategy will certainly struggle to survive in the current competitive environment.

In the increasingly competitive market context, real estate businesses need to have a solid financial foundation and clear strategies to face challenges. Companies that rely solely on luck in investing in project development are likely to encounter high risks.

Investing in large-scale real estate projects requires significant capital and strict financial management. Businesses lacking financial capability and risk management will find it difficult to maintain operations and generate profits. Flexibility and creativity in development strategy are crucial, as companies that do not promptly update trends and changes will fall behind.

In particular, changes in technology and risk management play a vital role in maintaining competitiveness. Businesses need to invest in technology to optimize processes and enhance operational efficiency. Those that fail to do so will face difficulties in surviving long-term in a challenging real estate market.

According to Dr. Tran Xuan Luong – Deputy Director of the Vietnam Real Estate Research and Market Evaluation Institute, the Vietnamese real estate market has experienced many phases of fluctuation over the past 30 years, from growth, stability, hot bubbles to freezing, stagnation, and recovery. Important laws such as the Land Law have had significant impacts on the market's development. The 1993 Land Law and subsequent amendments have changed land management, encouraged foreign investment, and boosted the market.

According to Mr. Luong, the introduction of new laws will help the real estate market recover and stabilize. However, although the "golden age" has passed, the market still has the potential to recover, and the timing depends on many factors beyond the new laws, including the market's self-adjustment and supply-demand dynamics.

Mr. Luong emphasized that the new regulations of the Land Law will increase land and tax costs, which may lead to higher real estate prices. However, these regulations also clarify and simplify administrative procedures, reducing unaccounted-for costs, which may not increase prices and could stimulate transactions and create market momentum.

According to this expert, in the context of businesses accessing land through auctions and tenders, companies with experience and capability will have an advantage. The new mechanism aims to reduce the "ask-give" situation, creating a fair competitive environment. Businesses need to be well-prepared with resources to participate in tenders, as only strong companies can survive and thrive.

In addition to development investment, the brokerage and real estate valuation service sectors will also have development opportunities due to changes in land valuation regulations. The workforce in the valuation sector is expected to increase fivefold in the near future.

"Furthermore, the revised Housing Law benefits homebuyers by reducing the pre-payment rate before receiving the house from 70% to 50%, protecting buyers' rights and reducing financial pressure. However, the issue of land valuation remains a challenge that needs to be addressed to ensure the interests of all stakeholders," shared Dr. Tran Xuan Luong.

Phan Chinh