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Foreigners keen on confiscated property
Foreign investors are expressing more interest in buying confiscated properties in a bid to save both time and money.
The Singapore property developer City Developments Ltd, for example, said in early 2009 it would begin investing in real estate but would first set its sights on confiscated hotels and trade centres.
Most of these seized properties have already gone through investment licence applications and land clearance procedures, and they are often priced below market.
Nguyen Dang Son, deputy director of Institute for Urban Research and Infrastructure Development: "Foreign investors will have many properties to choose from since many of them will be seized in the future because their construction timetable is behind schedule."
Local property companies have had difficulties in obtaining land clearance and capital, and high interest rates on bank loans have stalled investment.
Sharp increases in the price of building materials such as cement and steel have also contributed to the capital shortage. Many property developers have delayed or sold their real estate, market experts said.
Dinh The Hien, director of the Institute for Applied Informatics and Economic Research, said: "Foreign investors who buy confiscated properties will benefit but the country’s economic development will also."
"Authorised government agencies have not dealt with construction delays in a firm manner," Hien said. "If they would do this, banks and property companies could then recoup their capital more quickly."
According to data of the Ministry of Planning and Investment’s Foreign Investment Agency (FIA), nearly US$44.5 billion of new FDI was poured into Viet Nam in the first seven months of the year.
During that time, foreign investors injected $13.06 billion into real estate projects, accounting for over 29.3 per cent of the total investment.
At least $4.77 billion was used for building new urban areas and VND8.2 billion was invested in construction of office and apartment buildings.
When the stock market took a drastic fall in 2007, many foreign indirect investors shifted to other investment channels including the property sector.
Phan Huu Thang, FIA director, said it was important to encourage foreign investors to use land resources wisely and follow localities’development plans.
VNS
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