Vietnam News Network

Vietnam News: Local, National, Business, Sport, Entertainment and Technology

Trade ETHUSD, Bitcoin and Cryptocurrencies

BUY & SELL ETHUSD | View ETHUSD News & Updates

Buy Sell ETHUSD, Bitcoin and Cryptocurrencies

Real estate for consumption or investment for profit?   2010-11-29 - Viet Nam Net

The housing and real estate market must be the market for consumption, not for seeking profit. It is necessary to create favorable conditions for groups of low income earners in to obtain accommodation and prevent speculation-for-profit of some groups.

Government’s hands needed to control the real estate market

On November 26, an international workshop on housing and real estate market development was organized in Hanoi at which participants affirmed that the government plays a decisive role in the real estate market.

Habibullah Khan from Singaporean Education Organization, advisor to the World Bank, stressed that the controlling the real estate bubble requires the hands of the government.

He said that the global financial crisis, originating from the US, was caused by problems in the real estate market. The crisis led to the collapse of a series of banks. “The far too favorable conditions for providing loans led to the boom of the real estate market,” he said.

It was the failure in controlling the growth of the real estate bubble which dramatically pushed up the price of real estate in the US. The price of real estate in the US has increased by five times over the last 16 years. Vietnam has also been suffering impacts from the world’s financial crisis.

According to Khan, Singapore does not much depend on foreign capital sources, especially ODA (official development assistance). Singapore refuses ODA, while it only tries to attract foreign direct investment. The Government plays a very important role in creating accommodations for people. In Singapore, 90 percent of population have accommodations.

Sharing the experience on easing the speculation on the real estate market, Professor Stepphen Mar WingKai from Hong Kong said that in Hong Kong, people will have to pay assignment taxes, even when they sell houses for loss. The taxation aims to prevent speculative transactions and reduce speculation on the real estate market.

Regarding real estate management, he said, in Hong Kong, there are two segments, public real estate and the real estate owned by individuals. Hong Kong does not control the latter segment unless it needs to apply measures to stabilize the market when the prices are overly high or too low.

Vietnam’s real estate market lacks transparency

In the report showing the panorama of Vietnam’s real estate market, Nguyen Tran Nam, Deputy Minister of Construction, said that the real estate market in Vietnam has been developing over the past 10 years, but it has been making great contributions to the country’s socio-economic development.

By July 2010, the total outstanding loans given to the real estate sector had reached 210,770 billion dong, or 10 billion dollar. The bad debt ratio is less than two percent. By the end of 2009, the country had attracted nearly 500 foreign invested real estate projects capitalised at over 40 billion dollars.

There are 2500 housing projects and real estate developments covering an area of 80,000 hectares which are now under construction. These include 800 projects covering an area of 75,189 hectares in Hanoi, 1400 projects in HCM City and 260 projects in Hai Phong City. Industrial real estate has been developing strongly with 249 zones covering an area of 63,173 hectares.

The real estate market has been bustling in recent years with more and more transactions, especially in big cities like Hanoi, HCM City, Da Nang, which have helped the market become more professional.

The growth rate of houses in urban areas is 15 percent per annum. The average accommodation area in 2009 was 16.7 square metre per capita, while in the future is likely to be 19.2 percent in urban areas and 15.7 percent in rural areas.

However, according to Nam, besides the achievements, Vietnam’s real estate market still shows a lot of shortcomings. In particular, the market lacks transparency. People do not have sufficient information about projects, while the “underground purchase affairs” have been taking place, which will negatively affect the sustainable development of the market.

Which model for Vietnam?

According to Nam, the most suitable model for Vietnam is to establish a housing savings fund.

Under the model, regular employees, whether they have accommodations or not, will reserve one percent of their monthly salaries. They will get back the sum of their savings when they get retire. This house fund will be a big financial resource for low income earners.

Other news

VNR500: Private enterprises still cannot top the list   2010-11-29

BUSINESS IN BRIEF 29/11   2010-11-29

Stock market keeps falling, “securities players” suffer from depression   2010-11-29

Only businessmen can afford tickets for Tet flights   2010-11-29

Double digit inflation to flag belt tightening   2010-11-29

Hanoi real estate market: both western and eastern areas can bring profit   2010-11-29

BUSINESS IN BRIEF 27/11   2010-11-27

500 biggest Vietnamese enterprises have skill and spirit to overcome raging waves   2010-11-27

Who to blame on SABECO brand case?   2010-11-27

Vietnam probes banknote bribery involving governor   2010-11-27

Time to restructure State enterprises   2010-11-27

Controversy reigns over halt in Ha Noi building projects   2010-11-27

The condotel has landed   2010-11-27

Hanoi real estate market: both western and eastern areas can bring profit   2010-11-27