During the 6th session from October 23 to November 29, 2023, Vietnam officially passed crucial amendments and supplements to two significant real estate laws, namely:

         1. The amended Housing Law will come into effect from 01/01/2025

         2. The amended Real Estate Business Law will come into effect from 01/01/2025

However, during the October 2023 session, there are still 14 content groups pending formal approval for the amended Land Law, including (1) project land auction; (2) project land recovery/compensation; (3) land valuation. We anticipate that in the first quarter of 2024, Vietnam will officially pass the amended Land Law and implement it in early 2025

Housing Law (amended)

This amendment recognizes a clearer and more flexible legal framework for Developers in developing social housing for the middle-income. The amendments include (1) exemption from land use fees; (2) Exemption/reduction of procedures for determining collateral assets; (3) Removal of the regulation allocating 20% of commercial land for social housing.

From the perspective of homebuyers, the amended Housing Law expands the target group eligible to purchase social housing, including families with an average to decent income level or other groups not falling under other special policy categories.

Expected impacts on the overall market: We estimated specific benefits from this change, including (1) Increasing the future supply in the market (2) Increasing market demand from the “moderately affluent” income group.

Real Estate Business Law (amended)

In the amended Real Estate Business Law, more stringent legal requirements are stipulated for developers before launching sales for projects formed in the future and collecting funds from homebuyers.

Expected impacts on the overall market: Enhancing legal protection for homebuyers, mitigating the risk of developers raising funds in advance without carrying out necessary construction procedures.

Expected Impacts on the Prospects of the Residential Real Estate Sector

We believe that the Vietnamese government’s review and approval of the law amendments in late 2023 – early 2024 demonstrate a high commitment to addressing legal uncertainties and lingering market issues. In line with the development direction outlined in the 2025-2030 plan, the real estate market in general (and residential real estate, in particular) is expected to progress towards transparency and sustainability.

We anticipate a significant recovery in sales volume in 2024 compared to the low baseline of 2023 based on our expectations of (1) improved buyer confidence and real estate brokerage activities and (2) more favorable legal procedures for developers. However, we note that the non-passage of the amended Land Law may pose a risk to point (2) mentioned above, leading to a slower-than-expected pace of construction for new projects in 2024.

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