HCM CITY (VNS)— Despite dark predictions for the property market next year, local economists and real estate developers expect sales to pick up in 2014.
|Apartment buildings in the west of Ha Noi. Despite dark predictions for the property market next year, local economists and property developers expect sales to pick up in 2014. — VNA/VNS Photo Hoang Lam
Speaking at a conference on the property market in HCM City on Wednesday , Dr Tran Kim Chung of the Central Institute for Economic Management, predicted that the market would remain sluggish until the end of 2013.
However, Chung pointed out that several projects had completed construction and sold well after a long period of being idle, especially middle-income apartment projects that have relatively low prices.
Some parts of the market will continue to develop well, especially low-end apartment buildings, but buyers are waiting for the prices to fall even more.
In Ha Noi, apartments priced below VND1 billion are marketable, but sales of luxury apartments and construction on such buildings continue to be low.
During the first nine months of the year, sales in general were poor, but the market is expected to have a new development cycle next year and in early 2014.
"If you buy property now, you will reap benefits about three years later," he said.
Dang Duc Thanh, of the Viet Nam Chamber of Commerce and Industry, said supply still exceeded demand, and he urged investors and individual buyers to buy property now because prices had fallen by 50 percent since 2007.
He also noted that remittances sent from abroad to buy houses have increased year by year.
Last year, the country received US$9 billion and this year it will be over US$10 billion.
"Many overseas Vietnamese want to return to live here for the rest of their lives. A major amount of their money is invested in real estate," Thanh said, adding that he had just bought an apartment in the Hoang Anh Thanh Binh Project in District 10, which had reduced prices by 50 per cent.
Nguyen Xuan Quang, chairman of the Nam Long Investment Joint Stock Company, which has been involved in projects in HCM City and other provinces had an optimistic view of the market.
He claimed supply was lower than demand. "The real estate market has developed since 2000, and the speed of country's urbanisation is very fast, especially HCM City and Ha Noi. The biggest problem now is the bank interest rate," Quang said.
However, Dr Pham Do Chi, a former financial expert for the International Monetary Fund, predicted that the market would remain in bad shape for the next three years.
Next year, several enterprises will collapse if the government does not issue proper policies.
Chi said that public debt, including the government and State-owned enterprises, was at least US$100 billion. Debt related to real estate is estimated to be about VND1,000 trillion. He said the bottom of the crisis would not be in 2013.
"Viet Nam's situation is worse than the crisis that Thailand suffered in 1997. And Thailand did not have a debt equal to 100 percent of nation's GDP like Viet Nam," he said.
Several companies have started to lower than prices, and plan to continue to make cuts of 30 to 40 percent over the next three years. — VNS