|A corner of Phu My Hung Urban Area in HCM City. The gloomy property market requires combined efforts by relevant players including a restructure of investments by developers to recover. — VNA/VNS Photo Kim Phuong
HCM CITY (VNS)— The property market remains gloomy and requires combined efforts by relevant players, including a restructure of investments by developers to recover, analysts said.
Le Hoang Chau, chairman of the HCM City Real Estate Association, said the large inventory and bad debts by property companies are the most serious problems.
"To resolve them, developers must first of all have an overview of their projects and restructure their investments and products to match market needs."
They should be willing to make bold decisions like scuttling a project if necessary.
"They should apply to change the nature of their projects as well as apartment sizes according to demand and their financial capacity.
"Lowering prices, even accepting losses, to avoid further losses will help address the two problems."
The Government had to consider buying projects with apartments of 70sq.m or less for resettlement purposes or sales under the social housing programme. It had to make buying apartments easier for overseas Vietnamese and foreigners. Earlier this year the Government decided on a stimulation package, which includes a credit programme of VND20 – 40 trillion (US$1-2 billion) at an interest rate of 6 per cent to help low-income earners buy apartments.
Dr Tran Du Lich, member of the National Financial and Monetary Policy Advisory Council, said the programme would only have a positive impact on the market in the medium- and long-terms and not immediately.
Deputy Minister of Construction Nguyen Tran Nam recently signed a circular on the conversion of commercial residential projects into social housing ones. The conversion of projects, whether yet to begin or under construction, requires approval from authorities. If the developers have signed contracts with buyers, the conversion must be agreed to by all parties.
Sam Cuccurullo, executive managing director of CBRE's asset services APAC, said that in a situation where supply greatly exceeds demand developers should make sure their project stands out among the crowd, manage well, and add value to the assets. The National Assembly's Economic Committee said in a recent bulletin that many developers have not cut their prices and are waiting to be rescued by the Government. — VNS