Vietnam strives for stable and transparent real estate market for 2011

Vietnam strives for stable and transparent real estate market for 2011

Hanoi’s real estate market will start dramatic recovery from early 2011, according to the 2010 report released by Colliers International Real Estate Consulting.

Nguyen Van Minh, Secretary General of the Vietnam Real Estate Association, the real estate market remains hectic and prices will not decrease in the coming time.

According to the 2009 census on population and housing, 86.3 percent of houses are just temporary while demand remains high. In addition, population continues to grow rapidly. Therefore, the real estate market will still attracts investors in the next five to ten years.

A recent report from the Ministry of Construction has shown that Vietnam’s real estate market in 2010 saw many changes as investors were buying houses at average prices and small areas in order to meet the demand and increase the liquidity for investment capital. The demand for urban houses, especially social housing and low-cost housing for workers, and students has increased sharply in the recent time. In addition, the demand for office space, tourism areas and real estate prospects have also been on the rise.

Mr Nguyen Quang Tuyen from Hanoi Law University said that the real estate market in 2011 will develop dramatically, especially for low-cost housing. In fact, the supply of houses still does not match the demands.

According to Vinaconex Xuan Mai Concrete and Construction JSC, more than 2,000 people have registered for low-cost housing but only 325 houses have been sold.

To take advantage of the current demand, some individuals have built mini apartments. Recently, the State’s decree 90 has set the guidelines for the implementation of the housing law which allows individuals to invest in building and selling mini apartments. The prospects for mini apartments are very positive as they meet the demand of low-income earners with their suitable prices of VND1-1.5 billion for a 40-square metre flat.

Savills Vietnam’s Associate Director and Head of Research and Consultancy Tran Nhu Trung said that the company has anticipated the trend of mini apartments in 2010.

Despite difficulties in the real estate market, a series of apartments will be launched in the coming years.

According to a report from Savills Vietnam, there will be 29 real estate projects in 2011 which will supply around 13,400 flats in Hanoi and around 104,000 flats in HCM City. Some 104,000 flats are expected to be completed in the 2011-2-13 period.

Especially, the amended law on housing and the land law will create favourable conditions for overseas Vietnamese to own houses in Vietnam. Overseas Vietnamese will have good opportunities to invest in real estate in Vietnam, said Dane Moodie, Marketing Director and Project Development from Colliers Company.

However, according to the latest results on the office rental market in Hanoi and HCM City, while there is a shortage of houses for low income-earners, office rental market might be redundant and likely to face a decrease in prices in early 2011.

CBRE Vietnam said that there will be additional projects on high-end offices with total area of around 214,000 square metres in early 2011 and offices for rent will be a new trend of development in 2011.

The market will become more stable and transparent

Mr Nhung said that after two years of crisis, Vietnam’s real estate market is in the process of adjustment. According to experts, the real estate market will become stable and there will be no longer a virtual fever in the prices of real estate in Ba Vi like in the second quarter of 2010.

As scheduled, in January 2011, the Prime Minister will approve a project to expand the capital area until 2030 with the perspective on 2050.

Nguyen Huu Cuong, President and General Director of Cuong Phat Group said that if the project was approved, there would be a race among all potential investors in 2011.

However, the decree 71 and circular 16 will make the market more stable and transparent. Mr Cuong expressed belief that the real estate market will improve significantly.

Dr Dinh The Hien, a financial expert said that the supply of real estate products was growing, so it will be impossible to create a virtual fever.

However, Dr Nguyen Quang Tuyen said that policies had little impact on Vietnamese people’s choices, especially in real estate and gold and dollar purchases. Most of Vietnamese people flock to buy them when the prices are up and when the prices go down, they find ways to barter away. This is a reason why the market saw fluctuations in the recent time.

Therefore, Mr Tuyen said apart from supervising the legal system, the State should launch an information channel to provide forecasts of market development to prevent strong market fluctuations and build people’s confidence.

Source: VOV News