NEWS
A sense of sharing needed
03-10-2012
 Final touches are being put on a condo project on Nguyen Huu Tho Street in HCMC’s Nha Be District - Photo: Dinh Dung |
Nguyen Van Duc, deputy director of Dat Lanh Real Estate Company, told a recent seminar on how to make access to bank loans easier for property developers that in the current circumstances reducing prices is what housing development companies often choose first. Since it is tough to take out credit from banks, it is rational to raise funds from home buyers, Duc noted.
Duc said his company had sold around 700 of its 780 apartment units at Thai An 3 and Thai An 4 projects, including 52 coming from the breakup of big penthouses. This business result is what many others in the dormant sector are dreaming of at the moment. The lowering of prices is just one of the many measures required to cope with the doldrums, he said, adding that despite a reduced price, average customers can hardly afford to buy an apartment of above 100 square meters worth a staggering VND2 billion.
Unlike Dat Lanh, Him Lam Thu Do has chosen to wait and see. The company’s research and development department said now was not at all a good time to start work on new projects though the firm had accumulated much land over the past four years.
Hoa Phat Real Estate also has a number of property projects in hibernation. For the projects in which Hoa Phat is a secondary investor, Pham Trung Ha, director of the firm, said, if the construction schedule is met and prices are acceptable, they can still sell.
One of the impediments to new and half-done projects is a lack of capital. Property developers are bemoaning difficult access to bank loans. For some who have assets for collateral, they have been requested to do extra paperwork. If they could borrow, they would have to shoulder a high interest rate, at 17-18% a year, instead of the widely trumpeted 15%.
Statistics of a property consulting firm show that Hanoi still has around 40,000 unsold apartments and the figure in HCMC is about half as much. Experts have proposed urgently finding ways to clear these inventories to rescue both developers and lender banks.
A Him Lam Thu Do executive said if banks continued pouring money into property projects and developers went on financing their projects, both would end up sitting on a mountain of unsold homes given dampened consumer demand.
Pham Trung Ha of Hoa Phat Real Estate shared his view, saying the issue cannot be resolved without a sense of sharing among all stakeholders including property firms, banks, customers and relevant state agencies. There should be a consensus among them to regain confidence to move on.
Meanwhile, the head of the Housing and Real Estate Market Department of the Construction Ministry, Nguyen Manh Ha, proposed taking strong measures to prop up the dismal market, such as an exemption of 10% VAT for home buyers which could help pull down prices and home builders clear unsold stock.
Phan Thanh Mai, general secretary of the Vietnam Real Estate Association, requested interest rates for home purchasers be kept unchanged during the entire loan repayment period, a home buyer support fund be set up, and a long-conceived home savings fund be put into reality.
