HA NOI — The domestic property market was expected to recover this year with the addition of more investment from home and abroad, as well as a looser credit policy, experts said.
|Buildings under construction in the Splendora urban area in the capital's Hoai Duc District. Experts have forecast that the property market will recover this year and attract additional domestic and foreign investment. — VNA/VNS Photo Hoang Lam
The Ministry of Construction said the market would recover earlier if the Government offered a flexible credit policy in combination with flexible banking interest rates and high liquidity in capital flows to this market segment.
"The Government will loosen the credit policy for the real estate sector for the long term," said Dao Manh Hung, Head of Investment Department at the Savills Viet Nam Ltd Company, a foreign real estate consulting firm in Viet Nam, during a conference on development of the Ha Noi real estate market in the last quarter of 2011.
"In the short term, the real estate market needs foreign and domestic investment to reduce the capital shortage in banks which are the major source for capital in the local property market."
"Savills Viet Nam has promoted conferences abroad calling for investment from other countries. For example, the company organised a conference in Japan in September to attract investment to the local property market."
"The local property market is still in its early stage of development so it has great potential for foreign investment. Additionally, the real demand for property is high," Hung said.
At present, supply does not meet demand due to visible price fever on the market.
"There will be more mergers and aquisitions (M&A) among property projects this year in order to boost available capital for the projects," Hung said. "But there needs to be more transparency in the development of the M&A trend."
Nguyen Minh Tuan, deputy director and head of the Research and Consulting Department at CB Richard Ellis Viet Nam Ltd Company (CBRE), said the Government's solutions in the legal and financial systems should be synchronised.
Viet Nam's real estate market currently depended on banks for the majority of its funding, typically in the form of short term loans, while the market had not received medium and long-term capital support from funds such as the housing development fund, housing saving funds and real estate trusts funds, Tuan said.
The Government should have strict regulations to develop these funds, he said, adding that the regulations would help the funds to attract more capital.
Le Chi Hieu, chairman of Thu Duc Housing Development Company's management board said the property market would remain in difficulty until June when the market would experience better conditions due to inflation control and reduced banking interest rates.
The property market would start to recover from early 2013, Hieu said, saying the problem now was how to overcome difficulties until then.
Luong Tri Thin, chairman of Dat Xanh Group, said the firms would develop professional investment and business strategies to maintain operations and even find new development opportunities.
The Ministry of Construction reported that prices for all segments of the property market in the major cities of Ha Noi, HCM City and Da Nang, along with other provinces and cities nationwide, fell at the end of 2011. Some projects in Ha Noi offered 30 per cent reductions against earlier in the year.
The price reduction was a good sign for investors to restructure their investments and for customers with a real demand for property to enter the market, the ministry said. — VNS