Local property market recovering

Saturday, Jan 25, 2014 11:05

Local real-estate market is expected to recover this year. — Photo ktdv.vn

HA NOI (Biz Hub)— The local real-estate market has been signalling a recovery this year, according to experts.

Construction Minister Trinh Dinh Dung claimed confidence in the local real estate market is on the rise because more people are considering apartments and small housing units, culminating in an increase in successful property transactions, reported Dau tu (Investment) newspaper.

The structure of property products has changed and the prices of these have dropped, warming up the market since the end of 2013, Dung said. Therefore, the total value of property products nationwide at the end of 2013 dropped by 26.5 per cent to VND94.5 trillion (US$4.5 billion), as against the first quarter of 2013.

Luong Tri Thin, chairman and general director of Green Land Group, told Dau tu Bat dong san newspaper that the market would benefit greatly in promoting signs of recovery, including a recovery in money supply and loans from banks to property buyers and investors.

He noted that this year, the market will continue to face challenges, but difficulties experienced by the local property market will reduce by 60-70 per cent compared with 2013, which was a very difficult year for the local property market.

Le Chi Hieu, chairman of Thu Duc House Development Company (TDH), pointed out that opportunities in the local market in the coming months will focus on sales of small apartments with all facilities included because this segment sees high demand and low supply.

However, construction minister Dung stated that there are many challenges affecting the market, so the ministry of construction will work closely with the relevant ministries and sectors as well as the authorities of cities and provinces to resolve any difficulties faced by the market and to increase the efficiency of state property market management policies.

In the near term, the state will continue applying policies and offering support packages for enterprises and the local property market, such as reductions in corporate income for enterprises, ceiling interest rates for short-term loans, and value-added tax for commercial apartments with a total floor area of less than 70 square metres and a selling price of VND15 million ($714.3) per square metre.

He said the ministry will propose more favourable conditions for foreigners buying houses and apartments in Viet Nam to attract more customers to the local property market.

The ministry's statistics showed that successful transactions of smaller apartments in the second half of 2013 had doubled when compared with the first half of the year.

In Ha Noi, an estimated 6,450 real estate transactions were conducted, about half of which were conducted during the fourth quarter of last year.

Transactions in HCM City numbered 9,360, with nearly 70 per cent of them seen in the second half of the year.

Regarding the real estate inventory, the ministry explained that more than 20,000 apartment units remained unsold in Ha Noi and HCM City, presenting a loss of VND24 trillion ($1.14 billion). The land inventory was estimated to be worth VND34.89 trillion ($1.67 billion). — VNS

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