An apartment project is seen on Nguyen Huu Tho Street in HCMC?s Nha Be District - Photo: Dinh Dung
House prices beyond affordability of homebuyers and massive investment without orientation to the market?s digestion are seen as the major bottlenecks in the real estate market at present.
Several solutions have been put forward to deal with the problems of the property market, but the point is how to quickly put these solutions into practice, heard a discussion held by Nguoi Lao Dong newspaper in HCMC last Thursday.
Saving themselves
Nguyen Phung Thieu, general director of Saigon-Gia Dinh Real Estate JSC, proposed property firms should review how many of their projects were facing problems and seek solutions for each project because not all projects needed rescue.
?Any business must accept losses, and the budget should not be used to bail out real estate,? said Thieu.
He suggested certain commercial condo projects should be turned into low-cost housing ones, which would solve a lot of problems.
However, the rescue of the property market should be aimed at homebuyers instead of businesses, Thieu stated, adding that the State should consider VAT exemptions and low-interest home loans for buyers.
Le Thuy Huong, general director of Truong Thinh Phat Joint-stock Company, pinpointed the key problem was inventory. Only when their products sell well can project owners pay building material suppliers, contractors and banks.
Now is the time for investors, contractors, material suppliers and banks to join forces to save themselves rather than relying on the State, she underscored.
?reviewing the market
Su Ngoc Khuong, investment director of Savills Vietnam, questioned why the market had not improved although property prices had been slashed and why reduced interest rates had yet to attract homebuyers and investors.
The problem is house prices in Vietnam are still too high compared to people?s incomes. In addition, citizens dare not take out home loans given the fact that lending rates are revised constantly, Khuong stressed.
Economic expert Dinh The Hien asked how many realty firms had conducted surveys to see what consumers actually need. In order to rescue the market, enterprises must accept losses, he stated.
Another problem is that information about the market is insufficient, making it difficult for businesses to predict the market trends.
Le Huu Nghia, director of Le Thanh Commercial Construction Co., wondered if the demand for apartments was actually high. Through a survey in HCMC?s Binh Tan District, Nghia found that homebuyers still preferred houses attached to land to apartments.
To reduce the cost of apartments, the State must adjust land rentals and land use fees to reasonable rates, said Le Hoang Chau, chairman of the HCMC Real Estate Association.
In regards to home loans, Truong Van Phuoc, general director of Eximbank, said that from now to June 30 next year, the bank would give VND5 trillion worth of home loans with an annual interest rate of 12% fixed for the first three years. From the fourth year onwards, the lending rate will be equal to the deposit rate for 12-month terms plus 2%.
The Saigon Times Daily
Source: http://www.saigonmoney.com/2012/11/05/bottlenecks-in-the-property-market/
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