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Landlords convert office buildings into flats
Local government authorities as well as building-project owners are making every effort to give the property market a push, at a time when the future growth of the market cannot be foreseen. It is still an open question whether the market has fallen to its lowest point.
To improve the market, HCM City People's Committee recently approved in principle a proposal to turn several office and hotel development projects into apartments.
According to Ho Quang Toan, deputy head of the city's Department of Planning and Architecture, the proposal would address the problems facing property owners, thus contributing to the city's economic development.
However, final decisions about these changes would be based on both general and detailed planning for each area.
"These changes are based on the principle that there would be no changes to planning. However, planning should have some flexibility to suit reality," said Toan.
He added that there would be clearer criteria to implement their projects as detailed planning for the city's downtown area is about to be approved.
If office buildings are changed into apartments, social infrastructure including schools and hospitals will be taken into consideration.
Experts, however, are viewing this issue from different angles.
Dr Nguyen Minh Hoa, head of the Urbanology and Urban Management Faculty at the HCM City University of Social Cultures and Humanities, said it could in the short term help investors recollect money to pay debts or invest in the development of other projects. It could also help increase the city's budget and stimulate the property market.
But the crisis will eventually end at some time, and demand for office space will resume.
Once the projects are put into use, there is no guarantee that the population will be balanced in the city's core area (930ha), which is a requirement made by the city authorities. Harmonious scenery, no overloading of social services and no traffic jams are other city criteria for the downtown HCM City.
People capable of buying new apartments in the city's centre are usually wealthy, many of them have cars, which would worsen the traffic problem, according to Hoa.
Asian hubs with high population density, like Tokyo and Singapore, tried to solve traffic problems prior to an increase in population. But major solutions, including a metrorail and overhead road systems, still are a long way from being realised.
HCM City is facing a similar situation that occurred in Bangkok in 1997, but the Thai government bought the buildings of the owners who were facing difficulties. And, five years later, when the economy improved, the government began to earn profits from property value, and more important, social value, according to Hoa.
vietnamnews
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