NEWS
No near-term recovery for property market
26-10-2012
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Nguyen Quoc Hiep, chairman cum CEO of Global Petroleum Investment Corporation (GP Invest), said his firm had not begun work on a project in a prime site in Hanoi. The project will be delayed until July or August next year, when bank restructuring is completed, so the company can adopt a reasonable policy, said Hiep in the discussion held in Hanoi this Tuesday.
At present, enterprises should wait, he said. “Not until the end of 2013 would the market likely bounce back,” he forecast.
It seems restructuring of the banking system has a great meaning to realty project owners, especially those heavily depending on bank loans.
However, Tran Van Tan, head of the credit division under the credit department of the State Bank of Vietnam, said project owners should not wait until banks are restructured, but they should survive on their own cash flows.
Credits for high-end property and office-for-rent projects will remain tightened next year, but banks will be willing to offer loans to near-completion and low-cost housing projects, he said.
Bui Tat Thang, head of the Development Strategy Institute of Strategic, said the realty market would revive with right policies to attract remittances and gold into the industry.
He said overseas remittances amounted to some US$10 billion each year. If money from remittance and gold channels was poured into real estate, the market would warm up.
However, he suggested strong stimulus measures should be avoided as such a move will pose a risk of high inflation.
Since the year’s beginning, the market has been reoriented towards homebuyers with many attractive promotion and credit supporting programs offered for them. However, property project owners still face difficulties as buyers tend to wait for further price discounts.
To improve the market liquidity, investors have flexibly adjusted their policies to provide customers with more appropriate products.
Do Thu Hang, head of the research department at Savills Hanoi, said the market had witnessed certain adjustments.
A research of Savills shows that the majority of apartments sold in the year to date belong to mid- and low-end segments. In addition, apartment size has been reduced to meet the actual demand.
Buyers have also changed as well. Two or three years ago, most homebuyers are secondary investors, but now as much as 80% of the buyers are end-users.
According to CBRE, the volume of unsold apartments in Hanoi is over 21,000 while the figure in HCMC is around 18,000.
Consulting firms said a large number of the unsold apartments are of mid- and high-end due to rampant investment in high-end property projects in previous time.
