Condo projects in city largely unfinished
28-09-2012
 |
According to the HCMC Department of Construction, the city currently is home to over 1,100 apartment projects on the total planned area of over 13,700 hectares. These projects if all accomplished will supply the market with around 380,000 condos.
However, only 195 projects, or 17% of the total number, have been completed up to now. Among 815 unfinished projects, 158 projects have not completed investment procedures while 122 projects have yet to get off ground and 14 others have been suspended.
A survey of the department shows that many projects have fallen far behind schedule due to prolonged hardship of the real estate market, lateness in site clearance, investment formalities and financial problems of investors.
Speaking at a seminar seeking solutions for housing project developers on Tuesday, Nguyen Thanh Tai, former vice chairman of HCMC, pointed out the key reasons including unsuitable business strategies on the part of developers and the supply-demand imbalance.
Besides, many regulations in planning, policy and management are not suitable to urban conditions of the city.
Tai said a huge capital source is needed to develop property projects but many enterprises are financially incapable and have to depend on bank loans and contributions from home buyers. As a result, they face many difficulties when the market liquidity runs low.
Le Hoang Chau, chairman of the HCMC Real Estate Association, said the businesses in the industry still face policy-related problems such as regulations in site clearance, condo sizes and land use fees. The market will not recover until the problems are solved.
Nguyen Thanh Toan, deputy director of the HCMC Department of Planning and Architecture, said that many investors are seeking approval to reduce the height of condo buildings and condo sizes to meet market demands.
Apartment projects currently are being built following the 1:2:1 ratio, meaning 25% of condos being small-sized ones, 50% being medium-sized and 25% being large-sized units. Many enterprises said that this ratio regulation is not suitable to market conditions any longer.
Toan said managing agencies should not intervene in condo sizes and let it decided by enterprises to suit real conditions.
