VNRE - Credit tightening measures have created an opportunity for the real estate market, as members of the public look for safer forms of investment, according to Nguyen Manh Ha, director of the Department for Housing Management and Real Estate.
According to Ha, the measures would affect the property market, but businesses would adjust and people would have more choice.
Credit tightening could force people to sell their assets to recover their investment, giving people more options.
Housing transactions had grown in some areas because of higher interest rates, foreign exchange and gold, and as a result people had an opportunity to take advantage of low prices.
The Government resolution stipulates that ineffective housing projects would not be allowed to continue, and loans would only be issued for residential projects and low-income housing, because that is where the demand lies.
Housing projects for high-income earners would be temporarily halted, Ha said.
Pham Sy Liem from the Viet Nam Association for Construction said that credit tightening did not have to put an end to housing projects. Lawful projects in good locations would attract more investors and banks were ready to open their wallets.
According to Nguyen Van Duc of Dat Lanh Real Estate Company, one of the reasons the real estate market froze in 2010 was due to high loan interest rates. With measures to curb inflation and tighten credit for the property market, it was difficult to mobilise funds from banks.
Dr Le Xuan Nghia, deputy chairman of the National Finance Monitoring Committee, said the real estate market was showing strong signs of decline, particularly in the southern region.
With Government policy of tightening investment this year, other projects were bound to feel the effect, and it would impact negatively on the real estate market this year.
Nghia added that many enterprises in Viet Nam were involved in the real estate market projects. Businesses that borrowed capital from banks to invest in real estate should not expect to recover their investment for the next couple of years.