Vietnam Property Prices to Fall Further

Vietnam’s real estate prices will extend declines in 2009 as developers struggle to secure funding, new buildings are completed and the global financial crisis hurts demand, according to CB Richard Ellis Group.

 

Resale prices of condominiums in Ho Chi Minh City, the nation’s main commercial center, have slumped as much as 50 per cent since peaking in 2007 and would drop further in 2009, said Marc Townsend, managing director of the agency’s local unit.

 

Vietnam tightened credit in 2008 to choke off a surge in inflation, restricting funding for businesses and raising interest rates. The economy expanded 6.2 per cent in 2008, the slowest pace since 1999, according to data released December 31.

 

 

The central bank capped credit growth at 30 per cent earlier last year with restrictions for property and securities companies, and raised interest rates to the highest in Asia. The nation’s construction industry stalled in 2008, according to data from the General Statistics Office in Hanoi.

 

There are "hundreds of office buildings" under construction in Ho Chi Minh City and completions next year will boost supply and push rents down further, Townsend said. (VnEconomy)