HA NOI — The outlook for the real estate market towards the end of the year remains gloomy, despite credit loosening policies for the property sector and a reduction in borrowing interest rates.
The Ministry of Construction said that difficulties in the domestic economy would have a negative impact on the production and business of construction enterprises and property traders.
Many construction and property trading companies had already gone bankrupt because people simply aren't buying houses, so the real estate market had little chance of recovery before the end of this year, said economist Bui Kien Thanh.
The Government had plans to pump capital into some property projects and housing for low-income earners, Thanh said, but that was unlikely to affect the market as a whole.
The market would only really recover when people had money again to buy houses, he said.
To solve this stagnancy, property companies needed to switch from luxury high-end apartments, and concentrate on affordable housing, Thanh said.
If the companies could start selling properties, then banks may consider providing loans for future projects, he said.
Savills Viet Nam, a property consulting firm, said according to its survey on Ha Noi's real estate market in the second quarter released on Tuesday, one in five people asked said they were still interested in purchasing a property.
Most investors said they had no plans to lend capital for property development, according to the survey.
Savills Viet Nam expected property prices to continue to fall, especially villas and houses.
The Ministry of Construction reported that in the first half of the year, the real estate market had fallen.
Banks had reduced interest rates and increased credit for the real estate sector and those involved in the sector had taken note, the ministry said.
But this had failed to stimulate the market, and most buyers were waiting for prices to fall even further, it said.
The situation has had a knock on effect on building material producers and construction firms. — VNS