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Solutions to stabilise real estate market   2008-05-27 - VNA

Increasing the supply for the real estate market is one of solutions put out by the Construction Ministry to cope with the “fevers” of housing, office and space for production on the market.

 

Hence, it recommended localities to re-check and list prioritised property development investment projects on housing, offices for rent, new urban areas, and industrial zones.

They were also asked to speed up the improvement of investment, land allocation and ground clearance procedures, and give concrete sanctions to organisations and individuals that cause delays in the implementation.

For long-term purpose, the Construction Ministry urged localities to develop programmes on social housing construction as an important social-economic target in a bid to give housing assistance to State officials, employees, armed forces, and workers at industrial zones.

Moreover, the ministry recommended the continued perfection of law system and policies related to real estate, stressing that credit policies should be adapted to the market’s requirements.

In addition, transparency in real estate transmissions must be ensured and some related taxes and fees needed to be adjusted and added as an incentive to efficient use of real estate.

The real estate market suffered a “fever” in late 2007 and early 2008, particularly in Hanoiand Ho Chi Minh Citywith prices of apartments surging 30-50 percent over the previous year.

After that, it was suddenly stagnant as the State Bank of Vietnamissued a series of monetary policies to curb inflation, including restriction of loans for real estate investment, increase of loan interest rates and adjustment of taxes on real estate to prevent speculation.

According to the Construction Ministry, the land and housing prices reduced by 15-20 percent, and the offers of real estate for sales increased but the actual transactions was still limited. Even the market of high-end aparments and villas also has been cooling down.

However, the HCM City Economics Institute’s Director Tran Du Lich said it was a positive reaction from the real estate market as the prices jumping unreasonably over the recent time now started their adjustment.

Experts in Hanoi believed that the real estate prices, though cannot promptly reduce, will not heat up the market as before as the State’s regulations have begun their effects and the housing supply in the capital city has also increased.

This year, a number of high-end apartment building projects in Hanoiwill be put into use, with at least 260,000 sq.m of floor space provided by the Hanoi Housing Development and Investment Corporation alone, while many others will start their construction.



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