Times City Ha Noi. In Ha Noi, around 10,000 real estate transactions made through trading floors were reported in the first 11 months of this year, double the same period last year. — File Photo

HA NOI (Biz Hub) — Vietnamese people still find it hard to buy a house due to their very low salaries, even though the property prices are not high, said Nguyen Tran Nam, deputy minister of construction.

"The housing prices have been relatively in conformity with the purchasing power. Viet Nam is not listed among the top 20 most expensive places to buy property in the world," Nam said at a conference on property trading held yesterday in Ha Noi, adding that the market has seen some recovery.

The most important signal of the recovery has been the increasing number of real estate transactions over the past two years, especially in the small- and medium-sized apartment segment.

In Ha Noi, around 10,000 real estate transactions made through trading floors were reported in the first 11 months of this year, double the same period last year.

In HCM City, the number of successful transactions rose 35 per cent to reach 8,850 in the same period.

Several real estate businesses have also started their construction or have offered properties for sale.

Nam said that the property prices are stable or have fallen. In addition, the market's structure has been more suitable to home buyers' demands, keeping inventories low.

As of November 20, the inventories in the market were worth VND77.8 trillion (US$3.7 billion), posting a 39 per cent year-on-year decrease.

The property sector has received strong cash inflows. The debt balance in the market in the first three quarters of the year rose 12 per cent, while the total credit growth in the country was six per cent.

However, the deputy minister said the country's real estate market is too young as property transactions began 10 years ago.

"The market was young in terms of the management system, including policies and mechanisms to businesses and intermediate and home buyers," he added.

The biggest shortcoming of the market was unplanned development, which did not follow a specific timeline.

The product structure was also not suitable, as both the authorities and the investors had not studied the market supply and demand.

The setting up of a long-term financial resource designed for the market has been considered as one solution to overcome the shortcomings.

"A large part of the capital in the sector was from bank loans. Few businesses had more than VND1 trillion ($47.6 million) in capital, while bank loans were not stable," the minister noted.

He proposed that the government should have proper policies for market development, while investors should take specific actions.

Nam urged institutes and universities to conduct research on the market to provide guidelines to businesses and home buyers. — VNS