25 key transportation infrastructure projects promotes Vietnam real estate market recovery in 2024

According to the latest report from the Vietnam Real Estate Research Institute (VIRES), the 25 key transportation infrastructure projects currently being accelerated will become a key factor in promoting the recovery of the national real estate market after the impact of the COVID-19 epidemic and economic difficulties in 2022.

The report titled "Infrastructure Real Estate - Opportunities and Challenges" was jointly produced by VIRES' market research department and a team of senior experts. The report emphasizes that transportation infrastructure projects not only bring many opportunities to local governments and real estate investors, but also face many challenges in the process of moving towards comprehensive, coordinated and sustainable development.

Infrastructure planning in many regions has contributed to the rapid development of the real estate market, resulting in an oversupply of existing real estate products that far exceeds actual demand, as well as a lack of projects to meet real demand.

In some areas, although infrastructure has been established, it has not been able to truly guide social investment funds and promote local development breakthroughs. At the same time, the increase in real estate speculation has turned "fertile land" into wasteland, urban "coverage", and projects have stagnated. Recently, land prices were driven up by speculation.

VIRES pointed out that this current situation shows the need for in-depth investigation and research to correctly assess the role, opportunities and challenges of transportation infrastructure in local development, so as to propose solutions that change development methods and thinking, and truly leverage the advantages of infrastructure and land resources. capitalization capabilities to avoid disorderly and wasteful development of the real estate market.

"This study is of great significance in the context of the government's acceleration of national key and breakthrough transportation projects until 2025, which aims to create new development space, build new cities, service areas, industrial parks, and create new opportunities for the people. Employment and livelihood opportunities...”, VIRES confirms.

The VIRES report also provides a detailed analysis of the impact of transportation infrastructure projects on the economy, society and the real estate market. Indeed, the allocation of funds from public investment to transport infrastructure projects has directly and indirectly affected the real estate market. The direct impact is the implementation of large-scale infrastructure projects, which will release land resources and expand the development space for industry, tourism, services, etc.

The indirect opportunity is that the allocation of funds for public investment will stimulate overall economic demand, thereby driving financial flows and putting some funds (from the stock market, gold market, foreign investment, etc.) into the real estate market, especially when one sees transportation infrastructure projects taking shape opportunities for land prices to rise.

The report also pointed out that the 25 key transportation infrastructure projects that are being accelerated will provide recovery momentum for the national real estate market from 2023 to 2025, overcoming the impact of the COVID-19 epidemic and economic difficulties in 2022.

Based on this observation, VIRES presents a series of recommendations and proposals aimed at achieving coordinated and sustainable development of the real estate market led by transport infrastructure projects. This includes comprehensive and far-sighted planning solutions; accelerating the allocation of public investment funds and advancing the progress of transportation infrastructure projects; open and transparent planning information and project progress; avoiding the influence of group interests and strictly managing the land auction and project bidding process.

In addition, measures need to be taken to control the rising land prices driven by infrastructure and to effectively utilize land resources in the process of urbanization. Without appropriate control measures, overdevelopment will result, affecting the quality of urban space. Lessons remain about ghost towns, shelved projects and abandoned land, and the blemishes on the urban landscape as a result of urbanization...

For more information about real estate projects in Ho Chi Minh City and neighboring provinces, please contact FTT LAND!

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