Property market set to turn corner
14-06-2013
After much pain it appears the property market has bottomed out
According to a report recently released by the Ministry of Construction, the impact of new policies has encouraged buyers into believing in a recovery of the market.
“Real estate market in major cities has shown some positive signs when commercial banks are offering lower interest rates and easier access for housing loans,” the ministry stated in the report sent to the Deputy Prime Minister Hoang Trung Hai last week.
Deputy Minister Nguyen Tran Nam said that in the first five months of this year, although real estate prices continued a downward trend and trading volume remained low in big cities, small and completed houses had shown promise.
For example, the investor of Dang Xa new urban area in Gia Lam district on the outskirts of Hanoi, reported that 80 per cent of the 144 apartments had been sold out within two weeks in April.
According to Luong Tri Thin, chairman of Dat Xanh Group, the mid-end apartment segment would surely help warm the real estate market.
“Demand still exists. The problem is how to bridge demand and supply,” Thin said.
He said that the recent policies from the government, especially the credit package of VND30 trillion ($1.44 billion) would create hope for developers and buyers.
The ministerial report also stated that one of the positive reflections from the Resolution 02 issued by the government in January 2013 to support the real estate market, was more and more housing development projects tend to be restructuring into smaller apartment or social housing projects.
Due to the price reduction, more and more projects were able to meet the demand of customers, according to the ministry.
The prices of land in the new urban area projects and housing in Hanoi in the first five months were not much lower than those in the fourth quarter of 2012, having fallen far previously. Some developers have reduced prices to attract customers.
The apartment trading in Hanoi had been improved, mainly in lower segment of less than VND20 million ($950) per square metre, the report said. Meanwhile, liquidation in land plots was very low since majority of those projects are far from the city centre and their infrastructure system has not been finished.
In Ho Chi Minh City, the price of low-rise housing and apartments remained unchanged compared to the fourth quarter of 2012.
Many projects are offering low prices such as E-home 3 ($620 to $666), Khang Gia ($475 to $520), or Nhat Lan ($570).
The report further stated that the liquidation in Ho Chi Minh City had been low in the first five months with new transactions reducing compared to 2012.
According to reports from 130 real estate exchange centres, only 261 transactions were reported in the first quarter of 2013. This figure, meanwhile, was at average of more than 1,000 in every quarter of 2012.
Regarding the real estate stockpile, the ministry said that total value of inventory in housing development projects as of May 2013 was at more than VND125 trillion ($6 billion) in 55 cities and provinces.
However, the ministry said the inventory data in the report did not fully reflect the situation, because there was a large volume of under-construction apartments having been not taken into account. Therefore, the inventory data was actually estimated much larger than the data reflected in the report.
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