Around 120 trillion dong (US$5.75 billion )
will be injected into the economy in the remaining months of 2012, giving a
much needed boost for various sectors including real estate, a government
official says.
The
money is the remaining part of a 180-trillion dong fund that the government has
set aside for public investment, news website VnExpress cited Deputy
Construction Minister Nguyen Tran Nam as saying.
When
the fund is disbursed, it will help stimulate economic growth and have positive
impacts on real estate and other sectos, he said, noting that recent cuts in
deposit interest rates will also drive investors towards properties soon.
“But in
spite of all incentives, real estate companies have to restructure their
business and products, aiming for market segments with high demand and
purchasing power. They have to change their own projects first to save
themselves,” he said.
Le Xuan
Nghia, vice chairman of the National Financial Supervisory Council, said the
injection of 120 trillion dong into the economy is necessary after fiscal
policies were tightened too much in the fight against inflation, causing the
economy to slow down.
He said
increasing spending could help revive the real estate market slowly.
“Never
before has the real estate market received so much attention. The government is
trying to rescue the market and has begun to view its as a foundation market
(of the economy),” he said.
Real
estate group Knight Frank said in a statement last week that many companies and
individuals involved in the real estate market have lost considerable sums of
money over the past three years and many people have looked for alternative
investment options.
“However,
there is some light at the end of the tunnel,” it said, noting that tighter
legislation on gold trading, a downward trend in bank deposit rates and profit
taking from the stock market will lead to a “momentum” shift.
“We are
seeing many of the more experienced developers, investors and buyers that have
been sitting on the sidelines in the past 12 months now deciding that this is
the time to dip their toe back in the real estate water,” the Knight Frank
statement said.
“With
further interest rate cuts predicted throughout the course of 2012, confidence
is slowly beginning to come back to the market and provided the global economy
doesn’t give us any further nasty shocks for the remainder of the year and
inflation remains stable, we firmly believe the real estate market will start
to recover.”
Thanh
Nien
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