Real Estate Market in Oct - Dec: Unpredictable

The Vietnamese real estate market was quiet in the first nine months of 2011 and market participants are now waiting for new opportunities, Dr Tran Kim Chung, a specialist at the Central Institute for Economic Management (CIEM), said at the seminar on “Vietnam Real Estate Market: Difficulties and Opportunities" held by the Vietnam Network for Real Estate Transaction Centres in the North in coordination with the Housing and Real Estate Market Department under the Ministry of Construction, and the Vietnam Real Estate Association. Some capital flows are being pumped into the market while a certain amount of capital is being withdrawn from the market. Hence, it is quite difficult to anticipate the market trends in the last three months of 2011. A big change in 2012 is unlikely.

 

The expert added that the real estate market will wait for more signals from market driving signals in 2012. But, the outlook may be more positive. Firstly, the market accumulated resources for a new cycle of growth after 3 - 4 years of shrinkage. Secondly, socioeconomic situations in 2012 will develop more stably and the property market will have a chance of development. Thirdly, a group of new policies in 2011 and 2012 will spur the market development. Then, the real estate market will have new growth opportunities.

 

To increase funds for the lacklustre housing market, the Ministry of Construction proposed the Government for permit to set property trust funds. This is an important content in the draft housing development strategy from now to 2020, with vision to 2050.

 

Property trust funds will mobilise unemployed capital from the public and small investors by issuing warrants and invest in the housing market. This is considered a "life buoy" for the capital-thirsting real estate market. Members of the Vietnam Network for Real Estate Transaction Centres in the North also hope the State will introduce a complete legal framework to minimise risks property trust funds may cause.

 

At present, Vietnam has nearly 1,000 real estate centres and some 30,000 certified brokers. The Vietnam Real Estate Brokerage Association is expected to be licensed for establishment in December 2011. It will be managed by the Ministry of Construction and the Vietnam Real Estate Association.

Mr Nguyen Van Hoang, General Director of Rreit Management Company, said real estate trust funds have a lot of advantages and have been present in many developed countries in the world like South Korea, Japan, Singapore and China. Real estate trust funds are taking shape in Vietnam but no legal corridor for operations of such funds is now available. Foreign investors always keep very positive outlooks towards the Vietnamese real estate market. When property trust funds are in operation, they will attract more investment capital and use that capital much more flexibly on the market. Businesses and investors will lessen their dependence on bank loans.

 

“If we have good mechanisms and policies for real estate market and real estate trust funds can raise hundreds of trillions of Vietnamese dong, the real estate market will be ‘rescued’. Thus, the property market can make its own way and fear nothing about policy changes, capital sources or big market changes,” said Dr Tran Kim Chung.

 

Dr Chau Thi Thu Nga, President and CEO of Housing Group Joint Stock Company, and Deputy Executive Manager of the Vietnam Network for Real Estate Transaction Centres in the North, said: The Vietnamese real estate market was hard hit by economic slowdown and tightened monetary policy.

 

The market is expected to revive in the last three months of 2011. She anticipated that there would be no big waves on the market in the last quarter of the year but more investors will return the market as gold and stock markets are losing magnet.