Experts
gathered yesterday at a Hanoi conference to review real estate market
investment opportunities and discuss solutions for the stagnant sector.
"Challenges faced by investors and businesses
in the real estate market would be an opportunity to purge the market, reduce
weak investors and make it more professional," said Vu Tien Loc, chairman
of the Vietnam Chamber of Commerce and Industry (VCCI).
Experts participating in the event agreed that the
market had undergone a long slowdown, making businesses and investors in the
sector face difficulties.
They said the market had been nearly frozen and
reduced to the lowest possible level.
Statistics from the Ministry of Planning and
Investment showed that in the first quarter this year, around 2,400 enterprises
dissolved while 11,600 ones registered to cease their operation.
Can Van Luc, senior advisor of the BIDV bank's
Management Board said more than 350 real estate transaction floors in the first
three-months had been quiet despite of some trading in March.
Luc said estate prices in all segments of commerce,
housing and tourism continued decreasing.
Sharing the ideas, Phan Thanh Mai, general secretary
of the Vietnam Real Estate Association (VNREA), said estate shares tended to
decline strongly due to effects of the market and policies.
"Investors were reserved with share groups as
they were worried about financial risks from estate businesses," Mai said,
adding that the group would continue to cope with difficulties. Investors
therefore should consider to choose good performing shares to avoid losses.
VietRees' survey conducted in eight provinces also
showed that the reasons for the "quiet" market were due to extended
investment, capital shortage, unstable macroeonomy factors and incomplete legal
framework.
Mai added that 70 to 80 per cent of capital for
estate projects were bank loans.
"Businesses have been under the pressure of
capital costs because of high lending interest rates. Several firms tended to
transfer a part or whole projects to others," he said.
In addition, it was a struggle for estate
businesses, which had participated in the market for the last three to five
years while the market was "hot", to take their investment back.
A survey of Asia Commercial Bank (ACB) said around
30 per cent of businesses could not access loans due to complicated procedures,
mortgage shortages and high interest rates, though the Government had loosened
credit for the estate market.
John Gallander, director of Savill, said the market
needed professional marketing and sales people to attract buyers, while
long-term capital would be the most important.
He said the Vietnamese estate businesses often
mobilise capital from customers and bank credit. Listed enterprises could raise
capital on the stock market while big ones could issue bonds with banks'
guarantee.
Apartment complex
Nguyen Trong Ninh, deputy head of the Ministry of
Construction's Housing and Real Estate Management Department, said the ministry
would submit to the Government in the second quarter to allow construction of
25-square-metre apartment.
Ninh said the area would suit the market demand and
financial capacity, thus help investors sell their projects.
"The market shortcoming was that its
development did not link to the market orientation and lacked planning,"
he added.
The ministry would work with banks to review estate
projects, especially social housing ones which could be completed this year.
It asked banks to limit personal loans investing in
the market.
A real estate investment trust fund would also be
established to seek mid-and long-term capital with reasonable interest rates
for projects.
VNA
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