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Government steps up support for low-end real estate market   2009-04-01 - Viet Nam News

The Government is making a concerted effort to promote a healthy real estate market, particularly for students and low-income families, a high-ranking official has said.

"New financial policies should be established, including saving funds for housing and investment funds for low-priced houses, so we can carry out policies on building cheap house for low-income workers".

Two proposals on real estate will be submitted to the Government soon, which will help the market at a difficult time," Tran The Ngoc, Deputy Minister of Natural Resources and Environment, said at a conference in HCM City Saturday on International Networking and Co-operation in Real Estate Investment and Brokerage.

The most pressing issue was to develop low-price housing for State staff and dormitories for workers and students, Ngoc said.

Ngoc told the conferees that several laws related to the real estate market, including the Housing and Land laws, would be readjusted to reflect new realities in the market.

"In the past, local real estate focused on luxury housing demand and neglected the huge number of low - and medium-income families," he said. "The Government would like to change this trend to meet the demand of the majority."

Also speaking at the conference, Vu Thi Hoa, vice director of the Ministry of Construction’s Department of Housing Management and Real Estate Market, stressed out the importance of the Government’s role in the market.

"The Government has three roles, including creating a legal framework, managing the market, and joining the market as the biggest supplier of land," she said. "We also have the highest demand for public works and houses."

Hoa said the Government’s role was even more important at a time of recession, and suggested that a legal framework be completed first to make a strong foundation for the market’s development.

"New financial policies should be established, including saving funds for housing and investment funds for low-priced houses, so we can carry out policies on building cheap house for low-income workers," Hoa added.

Le Hoang Chau, chairman of the HCM City Real Estate Market, told conferees that there were good signs that the market was still healthy because all of the units of several apartment buildings, including luxury ones, had been sold.

"There has been a milestone change in real estate companies. They understand that there is no longer a huge benefit from real estate as in the past," Chau said. "Now they carefully calculate and reduce their selling prices, even 45-50 per cent lower, to survive."

He said some companies in Ha Noi had announced that they could now sell a 60 sq.m apartment at around VND200 million (US$12,000).

"If this apartment is available, it will revolutionise the real estate market," Chau said.

Truong Anh Tu of Sacomreal company suggested setting up an association for real estate brokers to professionalise the industry, which is now still full of amateur operators.

Three foreign real estate executives also shared their concerns about the status of the current real estate market.

"To do brokerage in the US, a broker has to study eight subjects related to real estate, for example, finance, law, lending and management. In Viet Nam, I realise there are only a few professional brokers," said Tuan Nguyen of US-based Global Realty.

Australian Mathew Tuton of Strategies 4U said: "In Australia, a commission from one brokerage ranges from 3 to 5 per cent along with tax. In Viet Nam, people try to save money by selling houses themselves, but they are not sure about the correct procedures, as a broker is, and they may also encounter problems with taxes."

Michel Guggenbul of EFI company said that he believed the real estate market in Viet Nam still had much potential. "That’s the reason why I decided to come here and speak at the conference," he said.



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