Vietnam - Property market remains gloomy in year ahead

The Vietnamese property market will likely remain gloomy until the end of next year, a trading floor operator forecast.

Despite repeated interest rate cuts and the easier access to capital, the number of houses sold in recent months is on the downtrend, said Huynh Kim Doan, director of Eden Real in HCM City.

“We sold 30 apartment units on average per month in the year’s first half, but the number of successful deals is on the decrease over the month,” she said, adding her trading floor was able to broker only a few successful transactions this month.

“For instance, we recently recorded a successful transaction for a townhouse in District 1. We invited 200 clients to the home and 25 showed a keen interest but only one of them decided to make a bid.”

Given low sales, Eden Real’s revenue has dropped around 70% year-on-year, said Doan. Market confidence is now 10 times lower than previous years. Only two out of 100 clients want to take out bank loans to settle their payments, she said when asked about easier lending conditions now.

In the face of the current tough economic conditions, homebuyers find it hard to make money. Therefore, few take out bank loans, and those who borrow funds have to cut spending to service the loans.

Some real estate transaction floors have halted operation or put them up for sale. Others are moderately active or sacked employees in order to cut costs, she said.

To overcome current difficulties, Real Eden is expanding its operation to other segments, Doan said. The floor now offers brokerage services in townhouse, serviced apartments and retail space to offset a sluggish residential condo market.

Saigon Times

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