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MOC says real estate market will recover soon
Currently, the demand for real estate – especially houses, business premises and offices for lease – has been increasing, which will pave the way for the real estate market to recover in 2010, according to Deputy Minister of Construction Nguyen Tran Nam.
The Deputy Minister in the recent interview given to Thoi bao Kinh te Saigon, said that Vietnam’s real estate market, in the eyes of investors, is always a market with great potentials.
Thoi bao Kinh te Saigon: The real estate market has been influenced by the economic crisis. However, experts say that the global economy would escape from difficulties in 2010. So, what do you think about the real estate market performance in 2010?
Nguyen Tran Nam: The demand is still very big in Vietnam, especially the medium- and long-term demand. At the beginning of the second quarter of the year, despite the global economic difficulties, many real estate projects in Vietnam still kicked off. The third and fourth quarters of 2009 even witnessed the slight ‘price fever’ in the market, especially in the western area of Hanoi.
One of the reason that makes investors think that Vietnam’s real estate market has great potential is that the demand for accommodations is very large. The foreign direct investment (FDI) continues flowing into Vietnam despite the global economic crisis. In 2009, the total FDI registesred capital was $21 billion, and one third of which, or $7.6 billion, came to the real estate sector.
As such, I strongly believe that 2010 will be a year of continued recovery for the real estate market in Vietnam.
TBKTSG: Which factors do you think will affect the development of the real estate market in Vietnam?
Nam: It is expected that Vietnam’s economy in 2010 will develop at a level higher than that of 2009. The fact that the Government is determined to curb the inflation at one digit level will be the most important factor that decides the stability and development of the real estate market in 2010.
In 2010, the urban development programme of Hanoi will be completed. HCM City and other cities like Da Nang, Hai Phong and Can Tho will also see the city’s urban development programme take shape, with a lot of big infrastructure projects beginning. This will help develop the real estate market.
The ups and downs of the gold and stock markets will also help develop the real estate market, because investors now tend to make investment in the real estate market instead of injecting the money in gold or stocks which cannot bring them huge profit.
TBKTSG: Which is the biggest problem of Vietnam’s real estate market, then?
Nam: In Vietnam, bank loans remains the main source of capital supply, while Vietnam still does not have saving or trust funds. A lot of real estate projects are in need of capital.
TBKTSG: What measures should Vietnam take to help develop the real estate market in a stable and sustainable way?
Nam: I think there should be a proper finance mechanism which mobilizes capital for the real estate market. Besides, we need to provide more commodities to the market in order to narrow the gap between the supply and demand.
The fact that we gather strength from the development of houses for low income earners should also be seen as one of the reasons that helps stabilize the real estate market.
vietnamnet, TBKTSG
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