The real estate market in 2013 ended with a bass note. Particularly, the market went down, while a series of fluctuations made some businesses close or transfer their projects. The majority of forecasts both at home and abroad note that the possibility for a real estate market recovery in Vietnam in 2014 is quite good. Three economic factors having a strong impact on market resilience include economic growth, external resources and the driving force of low-income housing.
Macroeconomic growth adding force
The economy is gradually regaining stability and growth, which will have a huge impact on the real estate market. The Government’s efforts during the past time have resulted in positive effects as inflation continues to remain low, interest rates remain unchanged, which is the basis for real estate experts’ prediction that the market will start to recover from the third quarter of 2014, accordingly the economy will receive a direct as well as indirect investment wave from abroad.
When people have confidence in the recovery of the economy, housing demand will increase, accordingly investment demand will grow. According to optimistic forecasts of real estate experts, from now until that time, the price of segments, especially land and adjacent villas, can hardly fall further.
The recovery of the economy, which depends on the outcome of the restructuring process of the banking system, is a necessary condition for the recovery of the real estate market. So far this restructuring process has been relatively slow, which affected a series of real estate projects, particularly those in southern region because the majority of the real estate business in the south use loans from commercial banks. These companies managing assets of credit institutions buying and addressing bad debts, particularly in the real estate sector, will have a major impact on the property market in 2014.
Foreign capital flows from policy on loosening ownership conditions
The second demand force for the real estate market in 2014 recognized by experts is outside resources. The growing number of experts, organizations and foreigners working in Vietnam is no small part of the housing demand.
Economic recovery and open market development will attract a lot of experts and foreign investors. Therefore, currently, some investors are considering the construction of more luxury apartments for rent. In the future, many investors are planning to build separate lease areas for each foreign community living and working in Vietnam, which is associated with the close infrastructure system.
Today, foreigners who want to own a house in Vietnam still face many difficulties due to the mechanisms. Thus, the desire of many investors is that the authorities will soon allow them to own houses in Vietnam.
Besides, Vietnam still does not allow foreign investors to lease land without infrastructure, to buy homes and buildings for sale, rent or lease, to receive land allocated by the State and use rights, to invest in infrastructure projects to transfer or lease land with infrastructure.
In fact, many foreign investors still tend to buy real estate projects struggling for funds, to continue to invest and upgrade projects to sell while waiting for the market to recover. Giving them the right to transfer the property will also be an opportunity for the real estate market to warm up. This will help reduce the amount of idle real estate inventory, which is large now. Besides, the participation of foreign investors will make the market more transparent.
So far, there have been many workshops and conferences discussing allowing foreigners to own real estate in Vietnam. Many comments have been made but an agreement has yet to be reached. Recently, on 25th December 2013, in the report submitted to the Government on the bill in the House amendment, the Ministry of Construction stated that one of the bill’s contents is expanding conditions and subjects for foreigners staying permanently in Vietnam and foreign institutions to buy and own houses in Vietnam.
Currently the Prime Minister has also requested the drafting agency to research and collect opinions to maximize this provision. If regulations are loosened, according to real estate experts, this will be a big boost for the property market in 2014.
Development of affordable housing
In 2013, that the government and a part of real estate businesses focused on investment in the affordable housing segment helps this segment gain many significant changes. Increased supply has offered people more choices. In particular, authorities have committed to promote disbursement of the credit support package worth VND30,000 billion in loans for low-income people to buy houses in 2014.
That people find it hard to access preferential loans comes from quite strict requirements on legal conditions. That functional agencies, banks and people find a common voice in determining the conditions of the loan will be an important factor to unfreeze current cash flow.
Loosening conditions for affordable housing loans, in addition to ensuring the objectivity and fairness to avoid risks for banks, also needs careful consideration to avoid falling into bad debt as it once occurred for the intermediate and premium segment before.
Đăng ký: VietNam News