Although State Bank of Vietnam (SBV) has reduced the deposit interest ceiling to 12 percent and loosened credit for real estate, many trading centres are still silent. Several have even gone bankrupt, or changed their business field.
Massive closings
Since 2011, the Vietnam real estate market has experienced a dull time due to lack of funds caused by the Government’s monetary tightening policy. Mr Bui Duc Tien, former sales clerk of PVC-Imicoland Real Estate Trading Centre said that since the market was so quiet, many real estate brokers just come to the office and leave when time is up without having any work. No longer does everyone race to trade real estate. Those who speculate property with bank loans now worry the most.
According to the survey on April 14th, on extended Le Van Luong Street, about 70 percent of centres and offices which once flourished have to close down or change into other fields. At present, only few are open with almost no clients. Notably, many real estate trading centres and offices on Le Van Luong have been changed into coffee shops, karaoke clubs, automobile shops, etc, some even had their floor for rent. “70 percent of real estate trading centres have closed down or changed to other fields, while some still keep trading just because their office lease isn’t up yet,” shared Mr Doan Ngoc Bich, working for website nhadat24h.net.
Mr Bich also said that the rent costs of offices on extended Le Van Luong Street has fallen by half since this location is only suitable to open real estate trading centres or offices. Nguyen Tuan Anh, a broker in a real estate trading centre, said that there’s no space for individual investors, only those with real demand for housing and land.
“Deflated bubble”
According to real estate enterprises, in 2012, the secondary price will stay still since buyers keep their cautious mindset. It is fund mobilization to continue construction that will be the top concern of investors this year.
Dr Dang Hung Vo thought that the interest rate reduction from the State Bank has helped to tackle funding difficulties for investors. In reality, many real estate businesses lack so much capital that they have to sell at a loss and give out special offers, which, in turn, attracts no clients. The current price, significantly decreased by 30-40 percent, is still too high for many people.
“Once, upon the introduction of a credit loosening policy, there were investors and clients calling to ask for information about projects,” Mr Tran Xuan Luong, Director of Thang Long Aviation Real Estate, shared. He also thought the policy is a positive sign, since it has defused the real estate bubble, but not the remedy for the situation. Sharing the same opinion, HCMC Vinaland Group CEO Tran Minh Hoang said that loosened credit will encourage banks to extend businesses’ principal, as well as release the real estate market from difficulties.
Vietnamese
