HA NOI (VNS)— The real-estate market could remain frozen unless the quality of housing projects was lifted to regain trust of consumers.
|A view of Phu My Hung urban centre in District 7, HCM City. — VNA/VNA Photo Van Khanh
This is the view of economist Dinh The Hien who said the biggest problems in the market were no longer high prices or supply-demand imbalances, but the loss of customer trust.
He said many projects had been labelled top class to push up prices, but in reality, the quality of the buildings and the services offered were often average. Many other projects frustrated buyers because they took so long to complete.
In HCM City, housing demand remained high and with a monthly income of VND10 million (US$498), many could afford a house or an apartment.
According to Hien, price of an average apartment was now about VND11 million per square metre ($530), middle-grade VND16 million ($762), and high-grade VND28.56 million ($1,360).
"Investors cannot lower prices any more in the current situation," he said.
According to the director of Le Thanh Company, Le Huu Nghia, selling prices were often lower than costs. "Prices are not high, but average incomes are low," he said.
The Real Estate Association has asked the Government to assist with land-use fees and corporate income taxes – and to simplify administrative procedures to encourage property owners to reduce prices further.
Director of the Department of Housing and Real Estate Management Nguyen Manh Ha said the ministry would halt real-estate projects that had little chance of succeeding.
The ministry also called for the establishment of a housing savings fund to enable low-income people to buy houses.
Hien forecast that the market might recover in the second or third quarters of next year.
Investment expert Tran Le Khanh predicted there would be a scarcity of high-grade apartments in a few years because low prices and huge investment capital together with long capital recovery discouraged investors.
Statistics show that there are 25,870 square metre of vacant offices and shopping centres, 21,645 vacant apartments, more than 1.6 million square metres of housing land and other unused properties in 44 provinces, worth a total of about VND40.75 trillion ($194 million). — VNS