VNRE - Real estate market in Vietnam has experienced unpredictable changes in 2010. Real estate traders havegained much profit whereas the dream to own a house of people with real need . In 2011, investors still desire a reasonable policy to help the market fairly develop.
Demand drowning supply
In the middle of 2010, real estate market came into a fever leading by the Western of Hanoi where land price was continuously pushed up and real estate market became a place where real estate businessmen set price and surfed. According to Mr Vu Xuan Thien, Deputy Director of Department of Housing and Real Estate market (Ministry of Construction), that prices being strongly made up in 2010 in real estate market origins from that supply is so few against the market’s demand. Fast profitability of real estate investment makes many investors seek business opportunities in real estate.
When real estate market was in sensitive time, Hanoi held an exhibition for referendum on Proposal of expanded Hanoi common plan, in which the core content was expansion of transport infrastructure, development of satellite cities, investment in Western, which made investors race to purchase lands in order to grasp in advance opportunities, making land price in this area soar up, added Mr Thien.
Agreeing with Mr Vu Xuan Thien, Mr Nguyen Trung Vu, said Director General of Real Estate Century Joint Stock Company, real estate market in the Western of Hanoi suffered a high fever in middle 2010 was due to so few real estate supply. Since there was no assistance information, investors ran to purchase without real demand. Most buying and reselling transactions took place among investors, which made land price increase to new level through each stage. Even there was a land, in one month, was transacted for 6 times etc.
Explained many real estate experts for status of inconsistency of markets in Hanoi and Ho Chi Minh City, assistance market information provided in two cities at different levels. While information in HO Chi Minh City is always timely updated to residents and investors, information in Hanoi is not. Real estate related information in Hanoi has been always hidden, which stole a stable foundation to base on from residents, therefore, investments according to rumors in Hanoi are higher, real estate investors more easily to push up prices. Meanwhile, there are too many supplies in Ho Chi Minh City market without buyer, even there is offered proposals without price difference. ON the contrary, the market in Hanoi comes into the opposite direction. Indicated Mr Vu: “If there is a stable and adequate supply in real estate market in Hanoi as in Ho Chi Minh City, there will be no price made up then.”
Not finding out the tie
It cannot denied that since there is Law of Housing, Law of Real Estate, there have been balances in real estate market to restrain “bubble”, transparency of the market has been improved compared with 5 years ago. However, according to Dr Nguyen Quang Tuyen, Dean of Subject Land Law (Hanoi University of Law), administration and policies can only partially influence real estate market, when information is still hidden; there still exists investment psychology from the crowd.
Psychology from the crowd exists not only in real estate market but also in other fields such as gold, US dollar etc. When prices of gold and US dollar go up, people run to purchase and when the market goes down, they race to sell out.
There hasn’t been a reasonable answer to a big constant question is how can there be no big change, making stable psychology for residents and investors so that there will be no such high fever as once happened.
According to Dr Nguyen Quang Tuyen: “In addition to revision of law codes on land, improvement in transparency of information is also essential. The market should be transparent with legal measures such as legal administration.”
Experts also mention issue of planning as one of reasons that push real estate up. According to Mr Nguyen Quoc Khanh, Chairman of Director Board of DTJ Investment and Distribution Company: “In addition to current unreasonable issue of supply and demand, planning issue in Hanoi is still confusing. HO Chi Minh City makes plan of satellite cities so reasonably that physical migration in Ho Chi Minh city is less than in Hanoi.” With confusion in policies due to planning, merging Ha Tay and Hanoi, especially in planning, real estate market will be hot and cold so suddenly. Therefore, the core now is to work out solutions to questions of planning.
Reported by Luong Tuan | VCCI