11:29:40 AM | 15/7/2008
Vietnam&rsquos real estate market will be encountering difficulties in a year and half to come due to the global economic recession and shortage of investment capital, Prof PhD Dang Hung Vo, former Deputy Minister of National Resources and Environment told the Voice of Vietnam in a recent interview.
Most real estate project developers are based mainly on bank loans, and now banks have recently refrained from providing loans for real estate projects and other sensitive areas to dampen speculation, Mr Vo said.
Asked whether the market will be frozen, Mr Vo pointed out that will dep on implementation of measures to curb inflation by the government of Vietnam.
To effective deal with speculation, Prof-PhD Vo proposed renewing the tax on land use, the government has asked the Ministry of Finance to compile and adjust the revised ordinance on tax and land use.
Vo said he already mentioned this issue several years ago.
&ldquoThe tax is always an effective tool for regulating profits on the market, limiting imaginary demand and breaking &ldquobubbles&rdquo that drive up prices in the real estate market and over-speculation,&rdquo Mr Vo noted.
The Vietnamese national assembly has approved a resolution to allow foreigners to own houses from Jan 1 next year and Mr Vo called this resolution a reasonable policy in the integration process and will have positive impact on the local real estate market.
However, realty developers have faced toughest-ever challenges as prices of property dived 50 per cent-60 per cent in the first five months, and ped 10 per cent in June this year.
If the downtr doest not stop, three fourths of the real estate companies in Ho Chi Minh City will go bankrupt in a couple of months, the Ho Chi Minh City Real Estate Association said. (VietnamNet, Voice of Vietnam)
Vietnamese
