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Housing prices might be even lower next year
Real-state prices might continue to fall next year according to Hoa Phat Land director Pham Trung Hau. He was speaking to the media about the possible impacts of Government measures to warm up the market.
To help rescue the economy, the Government recently lowered deposit and lending interest rates by one per cent in a bid to provide enterprises with easier access to finance.
Ha said interest rates for property investments should be adjusted after the move.
He said he did not expect an immediate positive reactions from the market, saying that home buyers wanted low interest rate for medium and long term loans. Previously, a preferential interest rate had been provided by commercial banks to real-estate companies and home buyers, but mainly for loans of between one to 12 months.
According to Truong Chi Kien, deputy director of the Him Lam Thu Do company, focus should be placed on speeding up clearance of real estate inventories, citing experiences from Thailand during 1998.
He pointed out that home buyers in Thailand had to pay interest rate of only 0.5 per cent in the first two years, which helped create demand.
The Government could also provide support through tax policies to lower repayments, Kien said.
A support package of between VND20-40 trillion (US$961 million-$1.9 billion) was recently announced by the Government to encourage enterprises and individuals to take part in housing development.
Nguyen Huu Cuong from Ha Noi Real Estate Club said that the credit package would operate efficiently only if it reached its targeted subjects, including investors and home buyers.
Meanwhile, Ha stressed that with or without support packages, real estate enterprises themselves should lower their housing prices and even accept losses to improve the liquidity of the market.
Experts forecast a boom in low-price apartments with average prices of below VND15 million per square metres ($715) in the next two years.
This will be helped by Government policies to boost social and low-income housing.
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