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Hopefuls see warming housing market in line to make revival

Update: May, 14/2015 - 09:50
About 8,000 deals were done for apartments in HCM City and Ha Noi in the first quarter. — VNS Photo Nguyen Manh Ha
HCM CITY  (VNS) — The housing market has been warming up and has potential for further growth, especially when supportive factors come into full play, according to an expert.

Vo Tri Thanh, deputy head of the Central Institute for Economic Management, told a conference held to discuss investment in the property market on Tuesday that the office and apartment segments were recovering, pointing out almost 8,000 deals were done for apartments in HCM City and Ha Noi in the first quarter.

That led to a 40-odd per cent reduction in inventories from 2014.

As for other factors, the economic recovery has been clearer with 6 per cent growth in the quarter compared to 5.98 per cent in 2014.

"It is anticipated that the (economic growth) rate may exceed the set goal of 6.2 per cent," Thanh said.

Demand was expected to increase as interest had revived among both end-users and investors, he said.

The Government had announced policies enabling overseas Vietnamese and foreigners to buy housing, he said.

Banks had fairly good liquidity, which would promote buying, he said.

Other asset classes like gold and dollars were less attractive with the recovery of the US economy, and bank deposits yielded low returns, causing investors to turn to property, he said.

Policy makers should strike a balance between enabling recovery of the property market and causing a bubble, he said.

"Other segments of the property market like industrial parks and logistics (transportation infrastructure and warehouse) and tourism have great potential for development."

He cited Viet Nam's location in a dynamic region and its deep integration, its growing middle class, and other advantages for its tourism development.

Su Ngoc Khuong, investment head at Savills Vietnam, concurred with Thanh, saying that new policies would kick-start the housing market.

There had been real demand since the third quarter of 2014, and Vietnamese treat houses as saving for the future, he said.

"People are still living in slums in areas like Districts 4, 7, 8 and so I think there is in no oversupply in the three coming years," he said, adding that the challenge was for them to raise money or access credit programmes.

Nguyen Xuan Quang, chairman of Nam Long Investment Company, said despite the slump in the market his company's affordable apartments had been selling well, adding that the issue was whether products suit customers.

Winfield Wong, an expert from HSBC Vietnam, saw the Vietnamese property as being attractive to foreign investors, with many from Korea, Japan, Hong Kong, and the US focusing on infrastructure.

FDI in the first four months was US$3.772 billion, with the property sector attracting $327 million or 8.8 per cent to rank second. — VNS

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