City to focus efforts on property demand stimulus
By Van Nam - The Saigon Times Daily
HCMC – In the second half of 2012, HCMC will focus efforts on stimulating market demands, especially that of the real estate market.
In addition, the lending package of VND30 trillion will be fully disbursed to enterprises right in this month to help remove the difficulties in production and business, heard a conference held on Monday on the Jan-Jun socio-economic situation of the city.
As of June 20, VND19 trillion has been disbursed to businesses in four priority groups of agriculture, export, small and medium enterprises and supporting industries, said HCMC Chairman Le Hoang Quan.
Nguyen Hoang Minh, deputy director of the central bank’s HCMC branch, added banks would be able to disburse the remaining sum of the VND30-trillion package with interest rates of less than 14% per year in June.
In the last six months of 2012, the central bank’s branch in the city will join hands with the HCMC Real Estate Association to review property projects and inject more capital to stimulate consumption in the realty market, especially at the projects for low-income earners and the urban housing projects.
At present, real estate credit accounts for 10% of the total outstanding loans at the HCMC-based banks, which amounts to some VND780 trillion. It is forecast that property credit will surge to 12-13% of the total outstanding loans in the city’s banking system, said Minh.
Chairman Quan said property products and offices for leases in HCMC had received much investment, estimated at VND84 trillion. There are still 8,000 low-cost apartments and many other projects left unsold in the city.
“Provided that 20% of the unsold apartments and offices was released from now to the year’s end, the frozen cash flow in the realty market would thaw, creating a pervasive effect on other sectors like building materials, cement and steel,” said the chairman.
At the conference, Quan requested the district governments and relevant agencies to work with property project owners and credit institutions on offering more capital to boost sales at such projects. The municipal authority will accelerate the process of granting home ownership certificates to buyers.
Quan suggested property firms should consider offering discounts, saying that no one would buy products at sky-high prices in the current tough times.
Speaking to the media on the sidelines of the conference, the chairman noted both supply and demand are available in the HCMC real estate market, but they have yet to meet each other because the values of the realty projects being chased up have distorted the market.
According to the city’s government, Jan-Jun deposits and credits in HCMC recorded slower growths than the year-ago period due to troubled production, stagnant property market and shrinking consumption demand.
However, the municipal government remarked the data in the first six months showed signs of economic recovery with gross domestic product (GDP) totaling over VND288.5 trillion, or a year-on-year rise of 8.1%.