Over the past two days, cabinet members had working sessions with
leaders of Vietnam’s two biggest economic hubs, Hanoi and Ho Chi Minh City to
discuss on the current frozen real estate market.
The move aims to collect facts
and figures of the market so that the government could take proper measures to
deal with the current dilemma.
Official statistics show that the
volume of unsold apartments is huge, with 14,490 apartments worth VND24,500
billion in Ho Chi Minh City. Meanwhile Hanoi has inventory of nearly 5,800
apartments and 3,483 semi-detached houses.
The paradox is that housing
prices are extremely higher than the average income levels of the majority of
people. Speculation and high interest rates have also made the problems worse.
In Hanoi, the housing transaction
volumes quickly boomed during a short period of time, sending wrong signal of
the real demand and market capacity and making it the lucrative field for
enterprises to flock into.
Besides, the structure of real
estate is also imbalanced as many enterprises only focused on building
high-quality and spacious apartments while social housing projects for
low-income groups and workers are slowly carried out.
In addition, financial and credit
policies defining the real estate market still contain shortcomings and
administrative procedures on planning, investment, land, site clearance and
compensation remain inappropriate.
Minister of Construction Trinh
Dinh Dung said the capital city’s housing prices are much higher than in Ho Chi
Minh City but fewer small- and medium-sized enterprises engaged in the market.
Regarding measures to unfreeze
the market, Chairman of Hanoi Municipal People’s Committee said the city would
cut down on supply and stimulate demand through creating favorable conditions
for needy people to buy houses.
Hanoi also proposed lowering
value-added tax for first-time buyers, lowering interest rates and establishing
financial stimulus packages.
Both cities stressed the need to
expand social housing constructions, adjust real estate structure, or transform
commercial housing projects into social ones to better feed the real demand.
During both working sessions, PM
Dung said that the government would deliberate on the real estate market at the
cabinet’s regular meeting at the end of this month and a specific resolution
will be adopted to deal with the current dilemma.
Comprehensive solutions are
essential in the coming time but all should be patient with gradual recovery of
this sector.
VGP
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