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VNRE - Property prices in Vietnam market have declined by 20-30% sharply so far, hence a lot of firms had to sell off projects to repay bank debts, but the prices of high-class apartments will be much lower.

The prediction was said by Marc Townsend—Managing Director of CB Richard Ellis (Vietnam) global research and consulting firm at the international conference themed “Credit Crunch: Where from Here for the Vietnam Real Estate Market?” on November 23 in HCM City hosted by DFDL Mekong law firm in corporation with CBRE and Standard Chartered Bank.

Regarding the office-for-lease segment, Marc Townsend spoke, the thing what renters are paying attention is competitive prices and it is right time for companies to move headquarters and offices from outskirts such as Dist 7, Tan Binh Dist to centre districts in HCM City.

In order to maintain and attract, property investors need to improve current buildings and increase utilities of buildings such as basements, decoration, energy saving, and seek opportunities to re-negotiate rentals.

CRBE Vietnam forecasted the Vietnam real estate market will remain gloomy 2012 in all segments. Only the segment of properties for education, international kindergartens, healthcare, and beauty, eating and drinking will continue generating good performance.

Sharing the point of view, Michael Kokalari—Chief of Kimeng Securities Co’s information research department, through talks with foreign investors in Vietnam, said that the investors from US, Japan, Europe paid a great attention to consumer beheaviors of young mid-class group in Asia generally and Vietnam particularly.

In the recent past, these foreign investors bought back stocks of Vietnam’s consumer industry companies namely Masan, Huong Thuy based on the development potential of this field, he noted.

Michael Kokalari assessed, despite the property prices declined 20-30% as announced lately by PetroLand Co, Vietnam real estate market has not gone to its equibrilium point. Many firms who were facing difficulties in liquidity, bank debts are not desperate because it is normal as debts increased in the crisis period.

David Tran, Vice Chair cum Director of the Asian Real Estate Association of America (AREAA) in US stated at the conference that the Vietnam real estate market is losing liquidity, so investors are seeking money sources outside the banking system, and overseas remittance is the way-out for property projects. If Vietnam continues improving legislative environment, removing barriers in law on contracts, taxation policies for foreigners, the realty market will receive a quite high volume of inward remittances from 4.5 million Vietnamese overseas.

Meanwhile, according to Ta Chau—Director of DFDL Mekong tax and law consulting firm, she was so excited to changes in Vietnam’s laws in 2012.

Ministry of Finance proposed to open Real Estate Investment Trust funds (REITs) which are expected to create a strong movement in the market in following years. Through REITs, creating an easy capital divestment regime whereby investors are able to withdraw capital if necessary, she remarked.

Experts also recommended 16 changes in property-related laws and regulations, including Law on Land, Law on Investment, and Law on Enterprises. These changes may create negative moves in Vietnam in next 5 years.

The Vietnam real estate market in 2012 is determined by the government decisions, she confirmed.

Source: StoxPlus

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