Hanoi struggling to rescue the real estate market

Similar to the general situation of Vietnam real estate market, Hanoi realty sector has seen small transactions during this year, which requires an early corporate restructuring in this field to boost product quality, cope with capital shortage and boost sales.
The requirement is attached with tighter management moves of authorities to avoid speculation and offloading.

According to Vice Director of Hanoi Construction Department Nguyen Quoc Tuan, the real estate market is going with unstable transparency, high housing prices, complex moves, widespread speculation and declining transactions.

“Transactions through or not via the real estate trading floor also plunged in 2011 in terms of volume and value, especially in the third quarter of 2011”, he concerned.

In the first half of this year, 2,700 property transactions were successful in Hanoi, but the figure in Q3 was only 900. The market mainly centralized in urban areas but volume, trading price and big changes were often seen in the west, and southwest of Hanoi.

In the coming time, Hanoi construction department will propose the coordination of relevant departments of architecture planning, planning and investment to examine, supervise and offer housing restructuring adjustment in the housing development project to meet the public demand, save land resource and ensure synchronic infrastructure of new urban.

Hanoi will limit the development of high-class property (villas, apartments with an area of over 120 sqm) in new commercial housing projects, and stop the projects which are unable to connect infrastructure and provide urban services.

Mr Tuan recommended banks to cut lending ratio for construction of new urban areas, office for lease, trade centres, markets, shops, housing for sales, buying land using right or compensating for ground clearance. In addition, banks should increase credit provision for building urban infrastructure, purchasing houses, completing housing projects towards the capital withdrawal in 2012.

In a recent meeting with Hanoian property developers, Minister of Construction Trinh Dinh Dung remarked that realty firms need to be restructured.

Dr Le Chi Hieu—Vice Chairman of HCM City Real Estate Association shared the same point of view. First of all, enterprises have to reduce selling prices, transfer or call for investment cooperation to deal with temporary capital shortage, cut down workforce and reliance on bank credit, offer products or attract capital source of foreign investors.

Enterprises should focus more on strategic investments in fields of mid-class housing and real estate for low-income earners, outskirt projects of big cities as the land prices remain cheap. – Vietbiz24

Tags: Vietnam Property market, Vietnam property sector, vietnam real estate market