Real Estate Market: Buyers Still Active

According to Mr Vu Van Phan, Deputy Director of the Ministry of Construction's Housing and Real Estate Market Management Department and  Department said: "The property market is not as hot as it was. The price is getting higher over red-hot property market times. After a long time of being in trouble, inventories increased and many real estate products were not be sold. It brought valuable experiences for investors in providing and defining products’ segment.”

 

Mr Phan said that housing needs remain high in recent times along with a plummet in prices; many people can afford to buy a house by their own savings. Investors, in the other hands, need to consider carefully as many of them have to cut loss to offset previous investments.

 

Regarding the increase in price of a number of projects in recent times, Mr Tran Ngoc Quang, Deputy Secretary General of Vietnam Real Estate Association, stated that the price increase will not be sustainable. Investors should reconsider previous lessons, and not increase the price because if price increases, it will slow down the real estate market recovery. It is not beneficial for investors and the real estate market in general.

 

Dr Le Xuan Nghia, Former Vice Chairman of the National Financial Supervisory Commission, member of the Government Advisory Board, commented: "Although real estate transactions are currently rising and the liquidity is improving as well, it is still hard for the real estate market to get hot again. The reason is that the economy is recovering at a very slow pace and it is very difficult to create bubbles. Besides, Vietnam's economy has gone up slowly in spite of a slight increase from the fourth quarter of 2013. The index of industrial growth, purchasing manager index (PMI) remain low. International organisations like ADB, World Bank, etc have revised downward Vietnam’s economic growth forecast. The real estate market depends heavily on economic growth, so low economic growth makes it difficult for the real estate market to get hot.”

 

Mr Nghia said that credit growth target of 12 percent of the whole system this year is not practical, not to mention bad debts that have been restructured and debts that have been “dodged” for credit growth. This target will be hard to come back because bad debts cannot be handled in a short time and problems related to bank restructuring have not been solved strictly. Thus, the property market will greatly depend on credit growth in the future.

 

Mr Vu Van Phan said that the market is having good signs of recovery. Real estate prices are plummeting from 20 to 30 percent, even 50 percent compared with the price during hot property market period, with the highest amplitude in suburban areas.

 

At the seminar, experts said that the property market is becoming more positive, however, it is still unstable, and also requires more efforts and persistence of all partners involved.

 

Customers’ psychology is also becoming more stable, more and more customers return to the market. But time and assurance from investors is needed, as well as policy systems to build up customers’ confidence.

 

Mr Tran Nhu Trung, Deputy General Director of Tan Hoang Minh Group said that: "At this time, we must recognize that the market is in deep adjustment period after the hasty and badly-prepared development period".

 

According to Mr Trung, in the year of 2014, the property market has made small positive changes, expressing through the liquidity increase from 2 to 3 percent. Because it is a slow but natural change, so the situation will not turn around in a short time.