Apartment housing projects in HCM City. (Photo: congthuong.vn) HCM City (VNS/VNA) - More positive signswould appear in Ho Chi Minh City’s property market in the year-end monthsdespite difficulties in the first half of the year, said Chairman of the HCMCity Real Estate Association Le Hoang Chau.
At a seminar in HCM City earlier this week, Chausaid it was not a rosy picture in the property market. Since March 7, 2017,when the Prime Minister requested the projects using State-owned land to bereviewed, the market has faced considerable challenges and difficulties.
In 2017, the real estate market grew 4.07 percentfrom the previous year but began to decline in 2018.
In the first seven months of 2019, the wholemarket shrank 34 percent in size, including a 29-percent fall in the projectnumber and a 34-percent decrease in the apartment supply. The supply dropped 44percent in the high-end segment and 34 percent in the pocket-sized segment.Meanwhile, there weren’t any low-end property projects opened for sale in thesecond quarter.
Between January and July, the Construction Departmentof HCM City submitted only three new projects to the municipal People’sCommittee for consideration, down over 80 percent. State budget revenue fromreal estate also nosedived more than 60 percent, he noted.
“Every cloud has its own silver lining, the estatemarket would have more bright prospect from now to the end of this year,including the implementation of projects in the eastern and southern areas,” headded.
However, he said that authorities should havewarnings about difficulties to help policy markers have suitable adjustments tosupport estate investors.
Experts said that bank capital still flows intoreal estate, which was not necessarily tightened as a concern.
Earlier, some are concerned about the draft thatwill replace Circular 36/2014/TT-NHNN, saying it could have adverse impacts onthe real estate market. Accordingly, the State Bank of Vietnam wouldreduce the ratio of short-term capital for medium- and long-term loans. Underthe three-phase roadmap lasting until 2022, the maximum ratio ofshort-term funds used for medium- and long-term loans will be reduced to 30 percentby July 1, 2020.
The draft circular also sets the risk weightratio for home purchasing loans worth 3 billion VND (129,000 USD) and aboveat 150 percent and the rate for loans worth 1.5-3 billion VND at 100 percent.[The current ratio for both loans is 50 percent.]
For loans worth less than 1.5 billion VND andloans to buy property in social and Government-supported housing projects, therate is set at 50 percent.
The revision was expected to tighten credit intoproperty market, especially luxury housing projects.
However, figures from the central bank showed thatcredit outstanding for the economy in the first half of the year increased by7.33 percent compared to the end of 2018.
Particularly in the real estate sector, creditoutstanding reached nearly 1.4 quadrillion VND (60.2 billion USD), posting 6.5 percentyear-on-year increase.
Lawyer Bui Quang Tin said the policies tighteningcredit into the property market in reality were applied for some projects andinvestors, not for all. At the end of the year, there would be many brightspots including capital inflows, especially in the real estate market.
Although the total volume of real estatetransactions in the first six months of the year decreased by 34 percent theprice did not decrease. This difficult phase of the property market was not thesame as the previous downward waves. Vietnam had a good macro-base as adevelopment opportunity of the stock market, real estate and growth of allsectors, he added.-VNS/VNA
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