Unsold condos a hot topic of conversation
29-11-2012
According to Dung, the unsold stockpile of condominiums and landed houses are now valued at VND40,000 billion ($1.9 billion). Dung said that according to the reports from 44 cities and provincial construction departments, as of August 2012, around 16,500 apartments, more than 4,000 semi-detached houses, more than 1.6 million square metres of land plots and 25,800 square metres of office remained unsold.
Apart from these unsold properties, Dung stressed that a large volume was in unfinished status. That means they were sold to the buyers, but the developers can not finish the work and put them into operation. As for the main reasons for this huge stockpile, Dung said the unplanned development of real estate developers had resulted on the huge oversupply. According to Ministry of Construction’s figures, less than 2,400 real estate projects are in the pipeline in 44 cities and provinces, occupying more than 71,000 hectares.
In Hanoi particularly 368 projects are pipelined, in total of 20,000ha, and of those 40 per cent are in underway. The huge stockpile was also attributed to an unreasonable structure which causes both shortage and oversupplying. The high and mid-end properties are in oversupply while lower-end houses are a shortage. Moreover, real estate developers mainly rely on loans from bankers and finance contributed by home buyers, while the developers’ capital investment is very limited.
According to Dung, stricter management must be done in the coming time, in order to reduce the stockpiles. Accordingly, projects which have not cleared alnd will be halted. Projects with land cleared but without infrastructure system will be slashed and projects which have finished land clearance and have an infrastructure system in place will have to restructure portfolios toward more on the low-end and social housing units.
