Residential owners are finding it hard to sell their properties despite discounted prices and promotions.
HCM CITY —
Nguyen Tran Nam, Deputy Minister of Construction, said at a recent seminar in HCM City that the unprofessionalism of developers had contributed to the real-estate slowdown.
Speaking at a seminar on solutions to the sluggish market, he said that while there was great demand for apartments of 80 to 100 sq m, developers who had invested in high-end units of 120 to 130sq.m were finding it difficult to sell because of the higher prices.
Nguyen Van Duc, deputy general director for property firm Dat Lanh, urged the Government to allow the construction of apartments of between 50 and 70sq.m., or even 20sq.m. so that buyers could afford them.
"Businesses should not just wait for new policies, but instead lower prices by cutting costs, profits or even accept some losses for survival," said Duc.
Developing apartments for low-income earners to lease, who can then buy property once they are financially capable, is one solution, said Professor Nguyen Xuan Trinh, deputy head of the University of Economics and Law (Viet Nam National University of HCM City).
He said it was impossible for low-income earners to accumulate the necessary capital to buy an apartment during their lifetime.
The professor also proposed that the Government reduce fees for land-use rights, capital, infrastructure investment and management costs, and streamline administrative procedures, which would help lower prices.
To ensure capital flow into the real estate sector, Dr Le Xuan Nghia, vice-chairman of the National Financial Supervisory Commission, called "inappropriate" the regulations that allow banks to lend to the non-production sector (including real estate) 16 per cent of their total outstanding loans at the end of the year.
He said the rate should depend on specific banks.
Nghia also said that classifying industrial parks and urban projects as non-production businesses had a negative impact on industries such as steel, cement, electrical equipment and others.
Nguyen Thi Thanh Huong, general director for Hung Gia Viet Real Estate Company, said buyers who do not purchase for commercial purposes should be given access to bank loans via a joint guarantee of the project owner, a bank and the buyer's employer.
The HCM City property market has been in a very difficult situation since early 2011, according to Le Hoang Chau, chairman of the HCM City Real Estate Association (HoREA).
Along with higher fees for land clearance, prices have increased for building materials, power, petrol and labour. Interest rates on loans have also gone up.
Meanwhile, sales have been sliding significantly, which have resulted in a financial imbalance for real estate developers.
Only five apartment projects kicked off in the first six months of the year, the lowest number in recent years, said the HoREA chairman. — VNS