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Real estate market paralyzed as giants fall into insolvency
The waves on the real estate market have always been created by the “big guys”. Therefore, analysts have every reason to believe that the leave of a series of a lot of “big guys”, the real estate market would enter a “hibernation” period.
Big guys absent from market
For years, the Hanoi real estate has been the aiming point of investors from all provinces and cities of the country. The names of big groups of real estate traders from Quang Ninh, Bac Ninh, Phu Xuyen, Lang Son provinces have become well known on the market.
Observers believe that it was the big groups of traders which created big periodic short waves on the real estate market. The real estate price in Hanoi was pushed up and then plummeted when banks tightened credit amid the investors’ surprise.
In July-August 2010, a real estate project in the west of Hanoi was opened for sale. The land price of the project soared from 55 million dong per square meter to 90 million dong per square meter just one month later. However, the price has later dropped to the initial level of 55-65 million dong per square meter.
Most recently, when the real estate market was gloomy and the prices decreased in all the areas in Hanoi and around Hanoi, the Van Canh and Speldora Bac An Khanh projects’ prices still increased sharply by 7-10 million per square meters.
These are the two most typical examples about the abnormal price fluctuations on the Hanoi real estate market. This shows that the prices on the market have been defined by groups of big powerful traders. They try to push the prices up and then sell real estate products they have to make profit.
However, in some cases, when they fail to control the market prices, a lot of big guys have to announce their status of insolvency.
The names of Nguyen Thi Minh Tam, Ta Viet Quang and Bui Thi Quyen have been mentioned when talking about the insolvency cases which have been discovered recently.
Nguyen Minh T, Director of a real estate trading floor in Hanoi, said that Nguyen Thi Minh Tam, born in 1961, from Bac Ninh province, who has been prosecuted for cheating and appropriating assets of people, is one of the loyal clients of the trading floor.
T related that Minh Tam once came to Hanoi with the sum of money big enough to buy 6-7 land plots. After Tam purchased the land plots, the market price escalated to the level, high enough for Tam to sell the land plots she purchased just one week before, for fat profit. Tam then used the money she got from land sale to make other deals.
T has revealed that when Tam make fat profit from the affairs, Tam always gave the “gift” of 50-100 million dong to every broker, besides the brokerage fee paid to the trading center.
Tam is not only a big fish in Hanoi pond, but in Bac Ninh province as well. VnMedia has quoted an investigation officer as saying that the real estate price increase in Bac Ninh province was partially created by Tam.
Statistics show that hundreds of real estate projects and thousands of apartments have been left unsold due to the frozen market.
Real estate market hibernates
Observers believe that the insolvency cases of Nguyen Thi Minh Tam and Ta Viet Quang have just kicked off the “insolvency wave” in the real estate market. This has raised a big worry about the recovery possibility of the market.
Experts believe that the hibernation period of the real estate market would surely be prolonged, and the real estate price would keep decreasing, because people do not have money to buy real estate products at this moment.
“The current situation of the real estate market is not similar to the stock market. Banks restrict lending, the black credit market has been shaken by a lot of insolvency cases, which means that big speculators do not have capital for trade,” an expert said.
Anh Dao
vietnamnet
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