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Real estate market snaps back
The nation's real estate was experiencing a fast recovery and increasing demand, a conference on the market in the capital last Saturday was told.
Deputy Minister of Construction Nguyen Tran Nam said the real estate market had recovered fast and had helped protect the country from the economic downturn.
Nam said the market would continue to grow because of the increasing demand for houses, commercial centres and offices, especially in Ha Noi and HCM City.
"The building of houses for low income people would influence the market," he said.
The market had four main characteristics: Fast recovery, the effect of government policies, the shift of investors to the low-income segment and improved transparency due to estate trading floors.
Other factors influencing the market would be the economic growth rate target, the need to curb inflation, urban planning, infrastructure investment, bank interest rates and the stock market.
Dat Xanh Real Estate Service and Construction Corporation chairman Luong Tri Thin said the market changed last year due to new policies and projects.
"In the context of changing gold prices and stock market, real estate has been the safest investment channel," Thin said.
"The global and domestic economic recovery, along with expected growth in the second quarter, will be motivations for the market."
The General Statistics Office showed the country would need more than 2 billion square metres of housing by 2020.
"That means about 1,000,000sq.m of houses will have to be built every year, bringing opportunities to investors," Thin said.
However, experts also mentioned shortcomings in the market – especially capital issues – as investors had to depend mainly on banks.
The State Bank of Viet Nam figures released in November showed the banking system's total debt in the real estate sector was VND218 trillion (US$11.4 billion), accounting for 11 per cent of its total debts.
The experts said unstable lending policies had caused difficulties for construction and investment by increasing the risk of capital raising.
Nam said the increasing costs of materials and land had been a huge challenge for efforts to solve housing issues of low income earners.
Another impact was the fact several real estate projects were progressing slowly.
"In addition, a lack of exact and integrated information in the market also caused managers and investors headaches," he said.
Nam said the Government should refine its financial mechanisms to develop the market, especially policies which supported housing projects.
Houses for industrial park workers, low income groups, students and the poor in rural areas should be further promoted.
"The nation should take measures to increase the supply of real estate in all categories and improve its information provision to support market activities," he added.
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