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Official foresees healthy real estate market
The long-term outlook for Viet Nam's property market was very optimistic, said Deputy Minister of Construction Nguyen Tran Nam at a conference conducted in Ha Noi on Thursday.
According to Nam, in the next 20 to 30 years, demand for housing will strongly increase thanks to a shift in policy and improved infrastructure.
Moreover, he said, thanks to the country's development, people would be richer and in a better position to pour money into the real estate market.
In addition, according to the draft housing development plan up to 2020 and towards 2030, the country targets 25sq.m of housing per capita by 2020. With a population of 100 million, Viet Nam will need to build 2.5 billion square metres of housing to achieve this.
"We currently have 1.5 billion square metres of housing. To meet the demand, the country will have to construct 100 million square metres of housing per year," Nam said.
"This year, the market is likely to develop at the same rate as in 2010."
According to Nam, the market this year will depend heavily on the Government's financial policies.
Real estate projects are likely to face difficulties due to monetary tightening policies.
Nevertheless, the market is still showing good signs, with a number of delayed projects in Ha Noi set to resume and improved transport infrastructure in HCM City.
The luxury housing market is already saturated this year, while low-income housing is being developed with support from the Government.
"Luxury housing will not be as an attractive investment as before, and many people cannot afford the high price tags," said Nam.
The downturn of the stock market and the devaluation of the dong were good signs for the market.
"People are less likely to invest in the stock market or foreign currency, and more likely to pour money into the property market," Nam said.
He also said that he believed the Government's policies would be effective and the economy would improve in the second half of the year.
"Thanks to that, money will pour back into the market again."
The sector has asked the Government to set up funds to help the market.
"For example, a trust fund will be set up in HCM City. People will be able to invest in property projects using the fund," Nam said, adding that the fund would be rolled out across the country if it worked effectively in HCM City.
In 2010, Viet Nam's real estate market attracted a large amount of foreign investors. Foreign direct investment in real estate hit US$6.8 billion, equivalent to 36.8 per cent of the total in the country.
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