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| Buildings and property projects around Pham Hung Road, Ha Noi. — VNS Photo Thai Ha |
HA NOI (Biz Hub) — Viet Nam's real estate market needs the Government to issue long-term policies to ensure sustainable growth in the future.
Nguyen The Diep, deputy chairman of the Viet Nam Real Estate Association, made this observation at a meeting between the real estate business community and the press on Thursday.
He said the local property market has had sustainable development over past years and transactions on the market have recovered since March with a growth rate of 4 per cent against February.
The domestic market has had a development circle of 5 years to 10 years, he said, but if the market faces changes in policies during a process of recovery, growth on the market would reduce and the market would need time to recover.
Meanwhile, property projects need large capital and enterprises did not themselves have enough capital and needed loans for their projects, he said. The changes in credit policies for the property market, such as the VND30-trillion package and the Circular 36, would create great impacts on the property market.
Therefore, Diep said the market needs long-term and consistent to suit its development circle, and avoiding a gap between the market and the policies.
The policies should give preference to investors to approach good financial sources and solve demand on social and cheap houses, he said.
According to Diep, there is strong growth in demand on social housing, especially in urban areas so enterprises should have business strategies for the buyers to easily approach the social housing projects.
House prices up
The real estate prices inched up in April, particularly the cost of homes in Ha Noi, according to the Department of Housing and Real Estate Market Management under the Ministry of Construction.
Ha Noi saw a slight price increase of between 3 per cent and 5 per cent in residential buildings in the districts of Ha Dong, Cau Giay, and Southern Tu Liem.
Meanwhile, the housing prices in HCM City remained stable for the month.
Both localities saw improvements in sales volume with a 6 per cent increase and 1,250 successful transactions in Ha Noi, and 7 per cent and 1,150 successful transactions in HCM City.
Positive signs were also witnessed in other localities, such as Da Nang, Khanh Hoa, Kien Giang, and Binh Duong, particularly in hi-end projects and tourism facilities.
Inventory down
The real estate sector reported a reduction of nearly VND3.4 trillion ($152.5 million) in inventory in April, from the previous month, to an estimated value of VND41.5 trillion ($1.86 billion).
The department said the highest inventories were recorded in residential and commercial land for projects located far from cities with insufficient infrastructure. They were estimated at more than 6.3 million square metres and valued at VND21.5 trillion ($964 million).
This was followed by town houses with 6,179 units worth VND11.5 trillion ($515.7 million). Unsold apartments stood at 5,959 units, equivalent to nearly VND8.5 trillion ($381.1 million).
Unsold properties in Ha Noi were calculated at VND6.1 trillion ($273.5 million), a decline of VND125 billion ($5.6 million) from March. Most of the inventory was in townhouses with 2009 units, while the apartment segment witnessed a sharp fall in its inventory with only 187 units in stock.
The total inventory value in HCM City was VND7.7 trillion ($345.3 million), falling VND607 billion ($27.2 million) from last month, mainly in the apartment segment, followed by residential land.
M&A in Q1
Meanwhile, JLL Vietnam, a real estate services firm, said mergers and acquisitions (M&As) on the domestic market continued where it left off in 2015 with deal volumes increasing in the first three months of this year and many successful transactions.
Notable M&As in the first quarter included TNR Holdings' purchase of TNR Tower in Hanoi from Vingroup for US$110 million. Keppel Land spent $93.9 million to buy part of the Empire City project in HCM City's District 2 from Empire City Ltd, while Hyatt and Thaigroup bought a hotel in Ha Noi for $165 million.
JLL Vietnam said many projects are attracting investors such as A&B Tower in HCM City's District 1, the Nam Hai Resort in central Quang Nam province and the Six Senses Con Dao resort in southern Ba Ria-Vung Tau Province.
The company also reported great interest from investors from the Republic of Korea, Japanese and Singaporean in Vietnamese real estate. It forecasts more M&As this year thanks to improvements in the market and growth slowdowns in some regional countries. — VNS