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Hanoi’s real estate market in prospect
According to the world’s leading real estate corporation CB Richard Ellis (CBRE), there are signs of Hanoi’s real estate market picking up in the near future.
At a recent seminar called “Housing Market - Adapt for Development”, CBRE Executive Director, Marc Townsend said that Hanoi’s real estate market has been frozen in recent times due to the downturn of the global economy, runaway inflation and high interest rates, and price hikes for construction materials. Buyers hesitation and over-speculation have also slowed transactions.
Mr Townsend added that in recent times, tightening credit policies have seriously affected domestic investors who need to borrow capital for construction. In addition, many people who want to buy houses will “wait and see” in the hope that the price of land will go down so the real estate market has become less frenzied these days.
According to a survey conducted by CBRE, in the previous years, 60 percent of the transactions in Hanoi’s real estate market originated from speculation. However, as a result of tightening credit policies to curb inflation, almost all banks have increased interest rates, even by up to 21 percent to prevent speculators from investing in the market.
Many investors come back
Vuong Tuan Long - chief of the business department of CBRE Vietnam, explained that the state’s policies have effectively helped to create a healthier real estate market. The CPI in June increased by only 2.14 percent compared to 3.19 percent in May. Accrual inflation has reached 17.1 percent, up 25.1 percent compared to last year. In the first half of this year, the inflows of foreign investment remained high at US$31 billion and are expected to reach more than US$40 billion in late 2008, with a large proportion going to the real estate market.
Four reasons to buy houses at the time
Mr Long said that when the economy begins to recover, land prices will increase accordingly. He also gave four reasons to buy houses at this time including good prices, more options, control over the construction progress and accurate building completion dates.
According to a survey conducted by CBRE, the average price of apartments, which are nearly completed, has fallen by 15 percent. The price of some high-end apartments like Ciputra, the Manor, and Golden Westlake has also dropped by 9.41 percent, 2.17 percent and 3.13 percent respectively compared to last year’s figures.
Mr Long said that only reliable contractors can meet the requirements of the new legal reforms. For example, many contractors must complete a building foundation before getting permit to mobilize money so that buyers can supervise the progress and quality of construction.
From 2006 to 2008, CBRE said the number of apartments for sale in Hanoi has dropped considerably from 4,000 in 2006 to 3,500 in 2007 and to 1,000 in 2008. However, CBRE forecast that the number of new apartments for sale will increase gradually to 2,500 in 2009, more than 3,000 by 2010 and 4,500 by 2011. Those who plan to buy houses later in the coming years will have more options to choose.
CPRE believed that selling prices will increase when the real estate market picks up to meet both buyers and speculators.
In conclusion, Mr Long cited the five factors which combine to bring success to investors: reasonable prices, sufficient space (from 60 to100 square metres), a convenient transport system, reasonable payment methods and the timely construction progress.
VOV
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