Industry insiders are weighing up how to break the icy property market.
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Vietnam Real Estate Association general secretary Phan Thanh Mai said the only way was up for investors as the worst time for property trading firms was in 2011’s fourth quarter.
Actually, a sequence of property projects faced delays and extended progress on the back of credit squeezes in 2011, seriously affecting market liquidity. Most property developers were starved of capital, particularly those with a pipeline of projects under development.
Mai said the market inundated with a massive number of property project several years ago with the construction of 486 new urban area projects from 20 hectares to 1,000ha across the country had not helped the current situation.
These new urban areas cover a total 74,057ha and Hanoi alone accommodated 200 such projects for implementation during 2011-2013 with over 60 per cent involving housings and new urban areas.
“It is time for property firms to revise their business plans to materialise profit targets, a worthwhile opportunity that should not be missed,” Mai said.
Bank figures show that deposits from the community into banks continued to surge in the first quarter of 2012, reflecting people’s cautious approach to risk-prone investment channels including property, according to BIDV’s senior advisor Can Van Luc.
Luc assumed strengthening business operations through cutting down costs and hiking labour efficiency, perfecting legal records to minimise the possibility of customers delaying their obligations, diversifying and making use of diverse capital sources and striving to drain out stockpiles would be the best options to property firms at this point of time.
In the long haul, firms needed to modify their business strategy avoiding too many firms acting in the same market segment and enhance governance expertise through applying world-class risk management and business administration standards.
“Property firms should not repeat the fault and learn to forge ahead from their wrongdoings,” said Luc.