Head of the Department of Housing and Real Estate Market Management Nguyen Mann Ha spoke to Thoi bao Kinh te Viet Nam (Vietnam Economic Times) about measures to balance the market.
Some people think that the housing market is "hot" right now and price increases are the result of an "invisible" demand, particularly for older apartment buildings. What do you think?
I think there is a lot of real demand in the real estate market in Viet Nam right now. The "invisibility" mentioned here means the products have not been delivered to consumers or the prices of the products have gone beyond the capacity of the people.
The price of commodities in general depends on supply and demand. The supply of houses and land in our country is limited, while demand is growing. Therefore, increases in real estate prices are normal. That's the rule. If we want the real estate price to decline, supply must increase together with demand.
Real estate prices also depend a lot on the property's location. For example, two houses with similar designs and quality can have two totally different prices, depending on their locations. Old apartment buildings are often located in favourable areas. If they are invested in and upgraded, their values will be very high.
What do you think about the future of the real estate market?
The real estate market will continue developing, as real estate demands in all fields such as houses, offices, industry, services and commerce are high. However, selling and renting prices will change depending on supply and demand.
The Government plans to speed up the construction of houses for low-income earners in the near future, so prices for these kinds of houses will gradually change to make them suitable to their market.
Real estate businesses seem uninterested in building houses for low-income earners despite the Government's support policy. What are the reasons?
The policy has only recently been issued and it needs time to prepare land and capital. In order to have products, construction must be carried out. It is impossible to have products right after the policy comes into effect.
Unlike other consumer products, this will need one to two years for construction of houses to see completion. Businesses have made recommendations and registered to develop houses for low-income earners with more than 200 projects. That is a big number.
A recent regulation requires real estate trading procedures to include a trading floor certificate. In really, how has this regulation been applied?
This is a new regulation so it has been widely applied, but it will be implemented more strongly in the future.
The real estate trading floor system has started to operate with around 130 trading floors that have registered with the ministry to be publicised on the ministry's real estate trading floor website in line with current regulations. This figure includes 74 floors in HCM City and 40 in Ha Noi. At present, more than 8,700 individuals have been granted real estate brokerage and assessing certificates.
What experiences can Viet Nam draw from the collapse of the US real estate market?
Although US consumption is great, its housing development is not suitable to the incomes of the American people. The US is rich, but many citizens have only an average income. The housing market has developed strongly and real estate prices have continued to increase over the past few years. The payment and consumption capacity of local people far exceeded their incomes, which led to the crisis.
In Viet Nam, we must be more careful with our real estate supply. Investors should not only focus on the high-end housing market. This is one of the reasons that can lead to a crisis and a collapse of the real estate market, because its scale and supply sources are limited. If we focus too much on high-end housing, it will lead to an over-supply of luxurious houses, even though the purchasing power of people will be limited. When consumption exceeds the economy's capacity, a crisis will occur.
When developing the real estate market, it is essential to develop all parts of the market equally for high-, medium- and low-income earners. If we develop all parts of the market harmoniously, the market will develop sustainably.
Many people are worried that when banks "enlarge", real estate credits will push up outstanding debts, thus affecting the real estate market. What do you think?
As I know, real estate outstanding debt is still under the control of banks and has not exceeded the safety level. Therefore, with strict control of management agencies and banks, there would not be any negative effects on the real estate market.
Source: Viet Nam News
Some people think that the housing market is "hot" right now and price increases are the result of an "invisible" demand, particularly for older apartment buildings. What do you think?
I think there is a lot of real demand in the real estate market in Viet Nam right now. The "invisibility" mentioned here means the products have not been delivered to consumers or the prices of the products have gone beyond the capacity of the people.
The price of commodities in general depends on supply and demand. The supply of houses and land in our country is limited, while demand is growing. Therefore, increases in real estate prices are normal. That's the rule. If we want the real estate price to decline, supply must increase together with demand.
Real estate prices also depend a lot on the property's location. For example, two houses with similar designs and quality can have two totally different prices, depending on their locations. Old apartment buildings are often located in favourable areas. If they are invested in and upgraded, their values will be very high.
What do you think about the future of the real estate market?
The real estate market will continue developing, as real estate demands in all fields such as houses, offices, industry, services and commerce are high. However, selling and renting prices will change depending on supply and demand.
The Government plans to speed up the construction of houses for low-income earners in the near future, so prices for these kinds of houses will gradually change to make them suitable to their market.
Real estate businesses seem uninterested in building houses for low-income earners despite the Government's support policy. What are the reasons?
The policy has only recently been issued and it needs time to prepare land and capital. In order to have products, construction must be carried out. It is impossible to have products right after the policy comes into effect.
Unlike other consumer products, this will need one to two years for construction of houses to see completion. Businesses have made recommendations and registered to develop houses for low-income earners with more than 200 projects. That is a big number.
A recent regulation requires real estate trading procedures to include a trading floor certificate. In really, how has this regulation been applied?
This is a new regulation so it has been widely applied, but it will be implemented more strongly in the future.
The real estate trading floor system has started to operate with around 130 trading floors that have registered with the ministry to be publicised on the ministry's real estate trading floor website in line with current regulations. This figure includes 74 floors in HCM City and 40 in Ha Noi. At present, more than 8,700 individuals have been granted real estate brokerage and assessing certificates.
What experiences can Viet Nam draw from the collapse of the US real estate market?
Although US consumption is great, its housing development is not suitable to the incomes of the American people. The US is rich, but many citizens have only an average income. The housing market has developed strongly and real estate prices have continued to increase over the past few years. The payment and consumption capacity of local people far exceeded their incomes, which led to the crisis.
In Viet Nam, we must be more careful with our real estate supply. Investors should not only focus on the high-end housing market. This is one of the reasons that can lead to a crisis and a collapse of the real estate market, because its scale and supply sources are limited. If we focus too much on high-end housing, it will lead to an over-supply of luxurious houses, even though the purchasing power of people will be limited. When consumption exceeds the economy's capacity, a crisis will occur.
When developing the real estate market, it is essential to develop all parts of the market equally for high-, medium- and low-income earners. If we develop all parts of the market harmoniously, the market will develop sustainably.
Many people are worried that when banks "enlarge", real estate credits will push up outstanding debts, thus affecting the real estate market. What do you think?
As I know, real estate outstanding debt is still under the control of banks and has not exceeded the safety level. Therefore, with strict control of management agencies and banks, there would not be any negative effects on the real estate market.
Source: Viet Nam News
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