Housing Law changes expected to spur property market recovery

Friday, Jul 03, 2015 08:00

The amendments to the 2014 Housing Law that take effect on July 1 promise to bring positive changes to the real estate market. Viet Nam News spoke with Phan Thanh Huy, Deputy CEO of property developer Novaland, to find out about his company's plans and where he sees the market headed.

Changes to housing laws have taken effect. How do you see the changes like allowing foreigners and Viet Kieu (overseas Vietnamese) to buy houses and to invest in the property market affecting the real estate market?

Deputy CEO Phan Thanh Huy. — File Photo

During the first six months of this year the real estate market has recovered and is making significant strides.

It is clear through the increasing real estate transactions, especially in HCM City. In the first half of 2015 there were more than 7,000 successful transactions done in the city, a year-on-year increase of 2.8 times.

After July 1 the new regulation that property projects need to be guaranteed by banks will create many changes in the market. Furthermore other related regulations on house ownership by foreigners and Viet Kieu (overseas Vietnamese) will also bring changes to the market, ushering in a new trend in the industry.

This is a legislative breakthrough and is totally consistent with the trend of international integration.

In my opinion, this new policy will create a positive impact on the market because many Viet Kieu (overseas Vietnamese), foreign experts and businesspeople have a desire to buy houses in the country. This is very good and needed to be encouraged since it would stimulate the real estate market. In addition, this will be like exports and needs to be focused on.

As a property developer, what are your suggestions for foreigners and Viet Kieu (overseas Vietnamese) planning to invest in the Vietnamese real estate market or buy houses and apartments in the country?

We think that there are five important factors for customers to note when buying a home.

The first is location. This is an immutable factor when buying a home. A good location should be conveniently connected with facilities like markets, schools, hospitals, and workplaces.

The second is the selling price and payment terms. It should be reasonably priced and close to the real value of the apartment. The price depends on the location and market segment. The segmentation of the apartment depends on design.

The third is planning and design. The project location, planning and design, and materials used indicate the project segment.

Fourth is the quality of the project and the prestige of the investor. The investor has to demonstrate professionalism, financial capabilities and commitment to customers through the construction process.

Fifth is liquidity meaning it is easy to buy, sell and rent out. This is one of the most important elements for a buyer to know if they have made the correct decision. Whether buying to invest or to live in, the apartment should be easy to rent out profitably.

How does your company plan to take advantage of the benefits these changes might bring to the market?

Compared with other countries in the region, Viet Nam still has a very low proportion of people with houses. In Singapore, the rate is more than 85 per cent.

With a population of 90 million people, Viet Nam has high demand for housing.

Moreover, this demand is not only among locals but also Viet Kieu (overseas Vietnamese) and foreigners who want to invest in Viet Nam.

The Sun Avenue Project in HCM City's District 2. — VNS Photo

Understanding the needs and psychological fears about legal provisions and house ownership rights, our company has designed many marketing programmes in which we promise to support clients with legal issues, investment and management.

The company will refund the full amount plus interest if a customer does not get ownership of a home in accordance with the laws of Viet Nam.

The co-operation guarantees that we signed with VP Bank and SeaBank last May has helped increase confidence and ensure maximum benefits for customers.

We hope our programmes with attractive incentives will help customers get the best fit and contribute to the revival of the real estate market.

The housing market seems to be recovering. How is your company capitalising on this?

Building a stable trademark is our long-term strategy. All our activities are based on this.

The year 2015 has marked the recovery of the property market but the competition has become more aggressive. Products must be diverse and cost-effective and quality must be guaranteed.

The market will move following the general trend around the world. People will gradually shift to mixed developments that include residential apartments, offices, and business places.

Accordingly, we always choose new products to meet the diverse needs of customers for housing or business or both.

This year we will continue to develop projects in strategic locations with new products like villas, townhouses, detached houses. In particular we focus on developing management services to offer a civilised living and security for home buyers, particularly overseas Vietnamese and foreigners.

Novaland has handed over the two projects ahead of schedule to customers - C2 Tropic Garden Tower (District 2) and Sunrise City central towers (District 7) and from now until the end of 2015 2,500 quality apartments will be handed over in accordance with our customer commitments.

Why does Novaland prefer the high- and mid-end segments though low-cost housing has more potential?

Since the inception of our group, we have had a clear strategy. We only invest in the high- and mid-end housing segments and we focus on projects in HCM City. This is a large segment that demands great specialisation.

Despite difficulties we are trying to hang on and continue to move forward thanks to the consistency in our long-term development strategy, focus on building a core team, cost control, quality control, and diverse products that are affordable to customers.

We are constantly looking for well-located land and confident to be a prestigious brand that always meets customers' needs. — VNS

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