|
Property prices likely to remain sky-high
A friend of my parents bought a lot of land near their house for around VND3.64 billion (US$173,333) last year. Since then, the 40-sq.m lot has increased in value by VND20 million.
Real estate prices have increased across the country, especially in Ha Noi and HCM City, almost on a daily basis.
The prices of homes and apartments in Viet Nam were out of control and had skyrocketed beyond the reach of most buyers, said Viet Nam Construction Materials Association Chairman Tran Van Huynh.
"As the cost of housing has increased, both low- and middle-income families have found it harder to afford a home of their own," said Former Deputy Minister of construction Tong Van Nga. "Meanwhile, speculators have bought dozens of homes and apartments in order to resell them at higher prices, causing real estate prices to continue to rise."
In a time of tight credit and high interest rates, too much money had been poured into the real estate market, said Huynh.
The development of Viet Nam's property market had lacked specific strategies and planning and investors had focused on housing and urban projects for high-income people, said Deputy Minister of Construction Nguyen Tran Nam.
The prices had also increased due to a number of other factors such as the cost of site clearance, infrastructure, building materials and the price of services related to property projects.
Most property experts predicted that the price would continue to increase this year although inflation is expected to drop and the macro-economy to stabilise.
This year, the price of houses and apartments would increase for a short period on the domestic market, especially at new projects that have just been put on the market and projects with upgraded infrastructure, said Pham Trung Ha, general director of Hoa Phat Land.
Phan Thanh Mai, General Director of VP Reit Real Estate Investment Fund Joint Stock Comppany, said that the predicted drop in inflation and better economic growth combined with more effective property investment compared to markets such as gold or securities would create a demand for property and cause the price to increase.
The price of property was bound to increase because of the exchange rate between the Vietnamese dong and the US dollar, the price of building materials and the cost of compensation, said Nguyen Huu Cuong, Chairman and General Director of Cuong Phat Construction Joint Stock Company.
However, developers were unlikely to increase property prices to avoid scaring customers away given the strict competitiveness of the market, according to a report on market trends in 2011 by the VietRees Market Research Company.
Prices are likely to remain stable this year and some developers may even reduce them slightly, according to VietRees.
For a long period, the price would stand at or fall lightly below its current level due to a surplus of property and improved infrastructure connecting urban areas with the city, said Ha.
Some property firms have already indirectly cut their prices with incentives such as low interest loans and furniture.
The State would encourage low- and middle-income housing projects by both State owned and private companies, Nam said, because the high demand for housing came from low- and middle-income people who accounted for the vast majority of the population.
Ngo The Vinh, Director of Vinh Gia Real Estate Floor, said this year, middle-priced apartments would be attractive purchases for many customers.
General Manager of Indochina Capital Group Peter Ryder said his group planned to enter the middle-income market to complement the high-end apartment segment.
Expectations on the increased supply of houses and apartments and State policies could create more opportunities for potential homeowners to buy a property.
Hoang Ha
vietnamnews
|
