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MOC to do utmost to prevent real estate bubble
Talking about Vietnam’s real estate market in the post-crisis period, Director of the Housing and Real Estate Market Department under the Ministry of Construction Nguyen Manh Ha said that the market will keep developing well thanks to the high demand.
Ha said that after a period of quiet due to the economic downturn, the real estate market has seen positive signs. Clients have returned in some market segments.
VnE: The national economy has not fully recovered yet, while real estate prices have increased significantly. Do you think that the price increases have been caused by speculation?
Ha: We do not have enough information to make a conclusion about whether it is speculation or not. In principle, people can purchase houses for accommodations or for investment.
As the laws do not prohibit people from purchasing assets, they can purchase houses for investment if they have money. Therefore, the purchase and resale of houses and land in all areas should be seen as a normal thing.
I think that the demand for housing is still very big in Vietnam, and it is not ‘virtual demand’. The word ‘virtual demand’ is used when housing products cannot reach those who have actual demand, or the sale prices of products are unaffordable for people.
The real estate price at a certain time depends on supply and demand. Currently, as the land supply is still short compared to the demand, the price increases are understandable.
VnE: Commercial banks have recently become more open in funding real estate projects. How do you think the move will affect the real estate market?
As far as I know, the outstanding loans for the real estate sector are still within banks’ control and have never exceeded the safety line. Therefore, I believe that with the strict control of the Ministry of Construction and State Bank of Vietnam, there will be no bad impacts on the real estate market, while a ‘real estate bubble’ will not occur.
VnE: Why have old apartments become so expensive recently?
Ha: This is also not an abnormal thing at all. Real estate prices always differ depending on position. Meanwhile, old apartments are always located in advantageous positions. Therefore, it would be profitable to purchase old apartments and upgrade them.
VnE: What do you think about Vietnam’s real estate market in the post-crisis period?
I firmly believe that the market will keep developing well thanks to the high demand. However, we cannot give predictions about prices, because prices are different for different market segments.
For example, the high-grade house segment is likely to see prices decrease, while the houses for low-income earners will become more reasonable with the support of the Government.
We cannot say for sure that the real estate bubble will not happen, because the bubble was seen in the US, a country with a high management level. However, we will try our best to prevent this when the national economy recovers. We will pay attention to secondary investors, especially in the high-grade house market segment, since this may be a factor that could cause troubles for the market.
vietnamnet, vneconomy
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