The government will do its utmost to prevent a real estate bubble from inflating the way it did in 2007 as the local economy recovers from the global crisis, an official said.
“We will focus on monitoring secondary investors, especially in the high-grade housing market, because [speculation by them] could be a decisive factor in prompting a market collapse,” Nguyen Manh Ha, Head of the Ministry of Construction’s Department of Housing and Real Estate Market Management, told Thanh Nien Daily early this week.
The latest property bubble reached its climax early last year after prices zoomed off the charts in big cities, fueled by high economic growth, a dire shortage of housing and weak government management, all of which gave rise to speculation.
Following the government’s tightened monetary policies in mid2008, as well as the global economic slump, the real estate market, especially its luxury housing market, has been in near-hibernation.
However, the market has warmed up recently with the government loosening its monetary management to boost growth, which was at a many-year low of 3.9 percent in the first half of this year.
The central bank early this year cut the base rate to 7 percent, compared with the peak of 14 percent last year.
Lower prices, capital from the government stimulus and a recovering stock market have contributed to a boom in low to mid-range residential demand in Hanoi and Ho Chi Minh City, according to a CB Richard Ellis (CBRE) Vietnam report released this week.
Ha rejected concerns that banks’ loosened property loan conditions could be risky, saying the loans were “under control” and at a “safe level.”
Ha said the government was strongly supporting an expansion of residential mortgages.
The State Bank of Vietnam said this week that outstanding property loans had increased 10.5 percent in the six months ended June 30.
Bad debt in Vietnam's banking system rose to 2.52 percent of loans at the end of June, from 2.17 percent at the end of last year, the central bank said in a statement, without giving the bad debt figure of property loans.
Ha said he expected great demand would continue to drive the real estate market’s strong growth.
Market pick-up
Richard Leech of CBRE Vietnam said at a press briefing in Hanoi on July 22 that the second quarter of this year “witnessed a reverse in asking prices among all condominium segments, after four quarters of continuous decreases, although only the low-end market increased significantly.”
In Hanoi, the luxury market only increased by 2 percent, while high and mid-end projects saw prices rise by 4-5 percent. The low-end market saw faster growth at 12 percent and as much as 20- 30 percent in certain projects.
Old apartment projects in prime locations have seen strong growth in prices. Most of these projects are planned for renovation or redevelopment soon. Buyers are driving up the price with the expectation of getting the rights to one of the newly built units, once redevelopment begins.
From September 1, overseas Vietnamese will have the right to buy, own or transfer houses and land-use rights in Vietnam. This will be important as a potential new source of demand for any luxury or high-end projects, Leech said.
In Ho Chi Minh City, meanwhile, the residential market has seen movement at all levels with “slow but steady trading” on the secondary market, according to Rudolf Hever, Senior Manager Research and Consultancy Services of CBRE Vietnam.
Peter Ryder, Chief Executive Officer of Indochina Land, said Thursday demand for residential condos increased in the first half as a result of lower interest rates.
“The current buyers are predominantly end-users as there are fewer speculative investors,” he said.
Luxury villas in HCMC are also proving to be a niche market with asking prices ranged from US$500,000- 1.5 million per unit, according to the CBRE report.
Source: Thanh Nien News
“We will focus on monitoring secondary investors, especially in the high-grade housing market, because [speculation by them] could be a decisive factor in prompting a market collapse,” Nguyen Manh Ha, Head of the Ministry of Construction’s Department of Housing and Real Estate Market Management, told Thanh Nien Daily early this week.
The latest property bubble reached its climax early last year after prices zoomed off the charts in big cities, fueled by high economic growth, a dire shortage of housing and weak government management, all of which gave rise to speculation.
Following the government’s tightened monetary policies in mid2008, as well as the global economic slump, the real estate market, especially its luxury housing market, has been in near-hibernation.
However, the market has warmed up recently with the government loosening its monetary management to boost growth, which was at a many-year low of 3.9 percent in the first half of this year.
The central bank early this year cut the base rate to 7 percent, compared with the peak of 14 percent last year.
Lower prices, capital from the government stimulus and a recovering stock market have contributed to a boom in low to mid-range residential demand in Hanoi and Ho Chi Minh City, according to a CB Richard Ellis (CBRE) Vietnam report released this week.
Ha rejected concerns that banks’ loosened property loan conditions could be risky, saying the loans were “under control” and at a “safe level.”
Ha said the government was strongly supporting an expansion of residential mortgages.
The State Bank of Vietnam said this week that outstanding property loans had increased 10.5 percent in the six months ended June 30.
Bad debt in Vietnam's banking system rose to 2.52 percent of loans at the end of June, from 2.17 percent at the end of last year, the central bank said in a statement, without giving the bad debt figure of property loans.
Ha said he expected great demand would continue to drive the real estate market’s strong growth.
Market pick-up
Richard Leech of CBRE Vietnam said at a press briefing in Hanoi on July 22 that the second quarter of this year “witnessed a reverse in asking prices among all condominium segments, after four quarters of continuous decreases, although only the low-end market increased significantly.”
In Hanoi, the luxury market only increased by 2 percent, while high and mid-end projects saw prices rise by 4-5 percent. The low-end market saw faster growth at 12 percent and as much as 20- 30 percent in certain projects.
Old apartment projects in prime locations have seen strong growth in prices. Most of these projects are planned for renovation or redevelopment soon. Buyers are driving up the price with the expectation of getting the rights to one of the newly built units, once redevelopment begins.
From September 1, overseas Vietnamese will have the right to buy, own or transfer houses and land-use rights in Vietnam. This will be important as a potential new source of demand for any luxury or high-end projects, Leech said.
In Ho Chi Minh City, meanwhile, the residential market has seen movement at all levels with “slow but steady trading” on the secondary market, according to Rudolf Hever, Senior Manager Research and Consultancy Services of CBRE Vietnam.
Peter Ryder, Chief Executive Officer of Indochina Land, said Thursday demand for residential condos increased in the first half as a result of lower interest rates.
“The current buyers are predominantly end-users as there are fewer speculative investors,” he said.
Luxury villas in HCMC are also proving to be a niche market with asking prices ranged from US$500,000- 1.5 million per unit, according to the CBRE report.
Source: Thanh Nien News
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