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It’s too early to say real estate market thawing
Keeping unruffled about the information that the real estate prices have been increasing in many localities, especially in Hanoi, Vu Dinh Anh, Deputy Head of the Market and Price Research Institute under the Ministry of Finance, said that it is now too early to say that these are the signs of a new real estate fever attack.
The real estate price in some areas in Hanoi has been increasing. Some people said that the price increases show signs of a new real estate fever. What would you say about that?
I still cannot see any signs of a new real estate fever at this moment. It is true that the real estate prices have been increasing in some localities because of several reasons. As commercial banks have loosened loaning, more people can borrow money to purchase houses. Meanwhile, as the gold prices have been skyrocketing, it would be unprofitable to inject money in to gold. As securities prices go up and down all the time, securities investments prove to fit surfing investors only. Therefore, a sum of money has been flowing into the real estate market instead of gold or stock markets.
However, I can say that our real estate market has special characteristics. Sometimes, people think that it is really hot with many people seeking to buy houses and land, but in fact, there are not transactions. In this case, I think that someone tries to push the prices up, while we cannot say that the market has become hot.
Unlike previous years, when investors mainly built high grade apartments worth several billions of VND, they now focus on the projects with medium prices worth VND 1 billion. What do you think about the tendency?
I think that developing the market segment proves to be a good idea as the products have high liquidity. High grade apartments should target high income earners, while high income earners have purchased apartments already.
Currently, high grade apartments now tend to decrease in prices. Meanwhile, the demand for the apartment’s worth of VND 1 billion remains very high, which is the target of between 15-20% of Hanoi residents. Besides, the products prove to fit to the immigrants from other provinces that have relatively high income and want to settle in big cities.
However, as the demand for this kind of apartments is high, the prices of the products have been pushed up to overly high levels in the last while.
You said that apartments’ prices have been pushed up because of the speculation. But do you think that it is also because of another reason, which cannot be settled overnight, the lack of transparency of the market?
I don’t say that land and house trading is a bad thing. However, products should go to those who really have the demand for them. However, in our real estate market, most of people purchase land and houses just to resell later; therefore, this cannot be a developed market
People have heard about the appearance of a kind of social housing (the housing projects subsidized by the State). Do you think that the appearance of the houses, the demand for which proves to be very big, will be able to help make the real estate market warm up again?
I personally think that the social housing program proves to be very good. However, the most important think is that we need to define who the subjects to purchase houses under this program are.
In the past, we once built houses for low income earners, but in fact, only high income earners and not low income earners, could purchase the houses.
It is clear that the apartments under the social housing program are all located far from the centre, which turns to be a problem for those, who want to purchases houses and live and work in the inner cities.
It is really unfeasible to reserve ‘golden land plots’ which have high economic value to build houses for low income earners. Therefore, it is understandable why the houses should be built on other land plots with less value.
Investors build houses for low income earners, but they go the same way as if they build houses for high income earners, who can travel long distances to offices by car. Will poor people, who lack vehicles to travel, purchase the houses far from the centre?
What would you say about the real estate market in 2009?
It is now still early to say anything about the market performance this year as there have not been clear signs.
Sometimes, people give predictions based on unclear factors. For example, people say the stock market is gearing up, but the VN Index at some 300 points and makes nothing. As for the real estate market, it is too early to say that the market is thawing.
I think we can give predictions after May when we have more information.
Trong Tuyen
Vietnamnet
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