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Real estate over-priced, say experts
Government agencies are seeking ways to control property prices, which are far exceeding their real value, according to a report from Government real estate market experts.
A group of interdisciplinary experts specialising in real estate recently submitted the report, which focuses on housing development and the real estate market in 2009, to Deputy Prime Minister Hoang Trung Hai.
Expenses needed to build 20 – and 25-storey buildings in Ha Noi are on average VND16.7-17.5 million per square metre, while the common price is much higher, standing at between VND28 million and 32 million per sq.m, according to the report.
Experts blamed the price difference on several reasons, one of which was the habit of "mob" investing, with many people flocking to buy a certain kind of property only because they saw many others do the same.
Lack of information has also influenced buyers who were not aware of the real value of property.
In addition, the poor management ability of real estate market management agencies has contributed to chaotic market pricing.
The report also says that although the country's per-capita housing area in 2009 doubled compared with the figure recorded 10 years ago, there were still seven million people in urban areas who needed to buy or rent housing.
To meet this demand, the country should build an additional 150 million sq.m metres of housing, which would require combined capital of VND3trillion (US$158 million) to VND4 trillion ($210 million).
In Ha Noi, about 5.5 million sq.m of housing is needed, in addition to about 11,000 accommodations for workers in industrial parks.
HCM City needs about 5 million sq.m of housing and more than 50,000 accommodations for workers.
The real estate market faces a lack of houses at affordable prices and suitable sizes for a majority of customers.
Houses for rent were in great demand in 2009, but they accounted for just 6.3 per cent of the country's total housing fund.
Based on these figures, experts said the country's housing demand was still high, especially for low-income earners, including workers in IPs and the poor living in rural and urban areas.
Experts also said the domestic real estate market this year would continue to recover thanks to favourable conditions.
The Government has allowed commercial banks to automatically regulate loan and deposit interest rates, which will create conditions for a more active real estate market.
Experts predicted that there would be about 90,000 apartments sold this year and more than 80,000 others completed. Apartments of VND18 million per sqm would attract many customers in Ha Noi and HCM City, they said.
Many investment sources are expected to be poured into HCM City and Ha Noi's neighbouring provinces like Dong Nai, Binh Duong, Vinh Phuc and Hung Yen.
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