Property trading floors close their doors

The real estate market has seen a number of property trading floors in the capital city close their doors, with economists attributing the chilled market to tight credit and monetary policies pursued by the State Bank of Viet Nam.
Tran Van Long, director of a real estate trading floor located in the My Dinh new urban area, said real estate traders had faced hard times this year, with the luxury apartment segment seeing a significant decline and land and housing transactions generally plunging significantly.

The competition between remaining real estate trading floors has became fierce. Many in the southern region have sought to elbow their way into the market in Hanoi. Others have reduced commission ratios for brokers.

According to the Ministry of Construction, the country is now home to around 700 real estate transaction floors.

Lan Anh, vice chairman of a Hanoi real estate club, said real estate developers’ patience had run out, and many had backed out of their project contracts to increase their liquidity and changed sales agents to cut costs. This has had an impact on real estate trading floors, pressuring many to close or shift to other lines of business.

Nguyen Quang Tuan, a broker on the Chau A real estate trading floor, lamented the dismal state of the real estate market. Normally, he said, as the year ended, people liked to buy new homes to welcome in the new year but that market was all but gone. The worsening economy had a negative impact on every economic sector, including real estate, he said.

Le Quoc Hung, managing director of the Vinacity real estate trading floor, also said that land transaction usually became boisterous at the end of the year, but this year there were few who could afford the high price of real estate.

Hung also attributed the cooling real estate picture to dramatic fluctuations this year in gold prices, drawing investors to other investments besides real estate.

Real estate transactions came to a standstill in the third quarter of 2011, said the deputy director of Hanoi construction department Nguyen Quoc Tuan. There were 2,700 successful transactions during the quarter, compared to 9,000 in the same period a year earlier.

Dat Lanh Real Estate Co director Nguyen Van Duc predicted the real estate market would get even tougher next year due to further economic difficulties and housing products that were simply too overpriced.

He urged the Ministry of Construction to impose appropriate regulations requiring apartments of 30-50 square metres to be sold at reasonable prices of between 500 million dong (US$23,000 million) to 1 billion dong ($46,000), enabling more people to buy.
Vietnam News

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