Despite the recent surge in land prices, the domestic real estate market is unlikely to see a suspension in the near future, reported Thanh Nien newspaper, quoting property experts and enterprises at a seminar it held in HCMC on July 18.
At the seminar, titled, “Crisis cycle and investment opportunities in real estate,” Tran Tuu, deputy general director of Hung Thinh Corporation, noted that timely policies and acceptable lending rates had helped manage the land price fever.
Hoang Duc Khuong from An Gia Co., Ltd, agreed that the real estate market remains attractive as many foreign enterprises are still keen on domestic real estate projects. The company will cooperate with the Standard Chartered investment fund late this year to execute more projects.
In addition, the capital poured into the property market has been strictly controlled. In the first half of the year, loans for housing projects in HCMC accounted for 10% of the total loans, while the national average rate was 7-8%, which was safe, according to a representative of State Bank of Vietnam (SBV).
SBV will continue to support projects to meet the demands of homebuyers. It has also sold a small amount of US dollars to stabilize the exchange rate, said Bui Quang Tin, lecturer at the Faculty of Business Administration of the Banking University in HCMC.
Meanwhile, commercial banks have created favorable conditions for individuals and enterprises to take out bank loans with preferential interest rates. The capital for real estate projects can also be sourced from the stock market, Tin added.
According to Huynh Thai Ngoc, deputy head of the Planning Division of the HCMC Department of Natural Resources and Environment, the Government has allowed HCMC to convert 26,000 hectares of agricultural land into land for other purposes and has raised the land allocation for industrial parks and residential areas to 6,000 and more than 7,300 hectares, respectively.
The Ministry of Construction will soon issue a set of national technical criteria for apartments and allow the construction of commercial apartments of less than 45 square meters, which will be a strong catalyst for the real estate sector, noted Le Hoang Chau, chairman of the HCMC Real Estate Association.
Nguyen Thi Thanh Huong, general director of Dai Phuc Land JSC, forecast a property bubble or crisis is unlikely to happen, adding that currently, real estate projects can meet only 10-15% of the demand, and enterprises have to take steps to reduce investments and shorten construction time to lower the prices of apartments.
According to Phan Truong Son, head of the Housing and Property Development Division under the HCMC Department of Construction, the fever for purchasing land lots in outlying districts is due to the strong development of road infrastructure, but the market has cooled down, especially after the inferno at the Carina Plaza condo complex. Nonetheless, he forecast a 5% growth of the market in the coming period.
Economic experts attributed the land fever to the lack of market information, which helped land speculators, leading to difficulties for low-income workers in buying apartments. However, the situation is now under control, including in special economic zones and the suburban areas of HCMC.
Over the last four decades, Vietnam’s economy has experienced a property crisis every 10 years.