Cash flow expected to go into real estate
19-06-2012
http://vietlandhousing.vn/en/property_for_rent
 Deputy Minister of Construction Nguyen Tran Nam (L) fi elds questions from members of Eurocham in HCMC on Saturday- Photo: Dinh Dung |
People still keep a huge amount of money, estimated at US$25-40 billion, and part of the savings will flow into the property sector in the coming time, Deputy Minister Nguyen Tran Nam told European entrepreneurs in HCMC on Saturday.
With the deposit rate ceiling slashed to 9% per year, savings is no longer an appealing investment channel. Meanwhile, the fact that gold and foreign currency channels are under strict control makes investors hesitant, said the deputy minister.
In addition, forex rate is forecast to remain stable as the country’s forex reserves are quite large. Given that many businesses have to shut down, the stock market also becomes less attractive to investors, he added.
Nam after referring to such factors predicted the cash flow will change direction to the realty market, but the point is it will take time for homebuyers and investors to regain their confidence in the market.
“The frozen property market will thaw, but not immediately like ice melts in your glasses, instead it will warm up gradually in line with the recovery of the economy,” the deputy minister told the European Chamber of Commerce in Vietnam (Eurocham) at the meeting in HCMC last Saturday.
The property market is seen as a locomotive of the economy. Once this market runs into troubles, it will lead to sluggish liquidity and rising bad debts in the banking system, Nam explained.
However, the measures to restore the realty market must be put in the general context of the economy when the Government is still on the alert for high inflation to rear its head, he stressed.
In the short term, all housing projects in new urban areas are removed from the loan-discouraged list and the projects slated for completion in 2012 are allowed to take out new loans. As such, real estate firms can have easier access to credit with lower interest rates.
The current challenges have eliminated non-professional investors from the market and forced other players to restructure themselves to supply products meeting the market demand.
Nam expected the real estate market will warm up gradually in the late 2012 and make recovery in 2013.
Launching products and waiting
Loosened credit has sparked a ray of hope for the property market. Instead of waiting for the market to turn rosy, several investors are seeking ways to approach potential customers, especially end-users.
Thu Duc Housing Development Corporation (Thuduc House) is putting up for sale 100 apartments in the two projects TDH-Truong Tho in Thu Duc District and TDH-Phuoc Binh in District 9, HCMC with incentives and flexible sales policy. The apartments are offered at VND14.9 million per square meter, or some VND950 million per unit.
Thuduc House has also launched 38 land plots of street-front houses in the Antigone commercial town in District 9 at prices ranging around VND19.5-26 million a square meter.
Meanwhile, HVK, a joint venture between Hung Viet Co. and KRDF03 of South Korea, is seeking buyers for The Eastern condo project in HCMC’s District 9. The project owner has launched the first 100 apartments priced at VND1.2-2.4 billion each.
Similarly, Singapore-based property developer CapitaLand is exploring the purchasing power of the market for the project PARCSpring in District 2. This is one of the two mid-end projects with some 1,700 flats that the group is developing in HCMC
Park Jong Woo, deputy general director in charge of sales and marketing at HVK, said the latest interest rate cut creates prospect and motivation for economic recovery. The market has shifted focus from investors to people with real needs for housing.
“Despite the unstable property market in Vietnam at present, it is obviously a dynamic market with enormous potentials,” said Park.
