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Former Deputy Minister: real estate price decreases bring positive effects
Former Deputy Minister of Natural Resources and the Environment, Dang Hung Vo, a real estate expert, said that the continued real estate price decreases in 2008, to some extent, have brought positive impacts.
Vo said:
The market was scorching hot for the first three months of the year, when the prices skyrocketed every day, but then have been dropping continuously since mid-year.
The real estate market in 2008 also witnessed a strange thing. In mid-April 2008, banks raised interest rates, which made it difficult for real estate developers to access capital. In principle, when the market lacks capital, commodities will become scarce and the prices will increase. However, in fact, the real estate prices began decreasing from that time.
The decrease of real estate prices can only explained with the fact that higher interest rates stopped the capital flow that fed speculation before.
The difficulties of the real estate market in 2008 partially originated from the inner problems of the market, especially speculation.
Have the price decreases in the real estate market brought any positive impacts to the market?
Yes, they have. At the beginning of the year, all investors tried to jump into the real estate sector to seek profits. However, as the market has fallen down, they have returned to their main business fields, thus helping stabilize the market.
Secondly, the market falls have helped minimize speculation, while creating favorable conditions for normal laborers to have accommodations.
Besides, the market decreases have also brought opportunities to the state to perfect the management tools over the management, and brought opportunities to restructure the market.
Do you think that the real estate market prices have bottomed out?
I know many experts believe that the real estate market prices have dropped to the bottom line, which means that the prices will not go any lower.
I, myself, do not think that it is important to find out the bottom line of the real estate market. I think that the more important thing is that the State needs to have reasonable policies, which allows the setting of reasonable prices for the market.
How do you think the real estate market will perform in 2009?
The market in 2009 will surely have to deal with the consequences leftover from 2008.
At the beginning of 2009, investors and speculators will have to pay bank debts, while there have not been any signs of market recovery.
Especially, when the national economy is forecasted to continue facing difficulties, the real estate market will not be the exclusion. Therefore, the possibility of a full recovery of the market in 2009 is not clear.
TBKTVN
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