Vietnam real estate market remains unstable: Why?

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VOV News English - 84 month(s) ago 28 readings

Vietnam real estate market remains unstable: Why?

(VOV) - Despite the fact that Vietnam is now a middle -income nation, its real estate prices are among the highest in the world.

In response to a recent press enquiry as to why many million-dollar villas and houses are standing empty in Hanoi, Prime Minister Nguyen Tan Dung asked the Hanoi Municipal People’s Committee to look into the matter and report to the Government by February 15.

While some people are very wealthy, most employees cannot afford an apartment on their salaries. It has been estimated that an employee with an income of VND4-5 million per month would have to fast for 30-40 years to save enough money to buy a flat.

According to an official of the Ministry of Construction, it is impossible for low-income earners to buy even a social house in major cities like Hanoi and Ho Chi Minh City.

The unreasonable real estates prices used to place Hanoi and Ho Chi Minh City among 100 most expensive cities in the world. Prices of land in the “golden areas” in Hanoi in Ho Chi Minh city are even higher than in London, where land price is considered the most expensive in the world.

According to the Vietnam General Confederation of Labour, one third of the state employees do not have their own house.

Current time, only 30 percent of state employees in Hanoi are provided with houses and flats, 90 percent of which were built before the 1990s, and about 15-20 percent of those employees are facing difficulties with accommodation.

Despite the development of the real estate market, it is still very risky as the State cannot control it. Under-the-counter transactions are making the market less transparent. According to a recent survey, Vietnam has the lowest real estate transparency index among 15 countries in the Asia-Pacific region.

The paradox of the real estate market in Vietnam is causing unexpected fluctuations in prices and leading to a waste of land, especially in big cities.

In addition, both authorities and people do not have accurate information on how many residential projects are being implemented so people may not have many chances to buy houses.

It is obvious there are currently weaknesses in the state management of the real estate market. This has negative impacts on both the role of the real estate sector in the economy and businesses’ investment for expanding their operation as well as people’s living conditions.

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