Buildings in HCM City (Source: Internet)
HCM City (VNA) – 2015 ended with plenty of highlights in the real estate market of the southern city of Ho Chi Minh, however upcoming challenges and opportunities are requiring enterprises join hand to develop the market sustainably.
The city’s real estate market rebounded and enjoyed high growth with more than 26,000 successful transactions recorded in 2015. It skyrocketed 150 percent compared with 2014, said the municipal Department of Construction.
The Ho Chi Minh City Real Estate Association (HoREA) reported that the city’s real estate credit in 2015 reached 140 trillion VND (6.3 billion USD). Meanwhile, more than one fifth of 5.5 billion USD of overseas remittance sent to the city came into real estate investment.
In the first month of 2016, the city recorded about 1,600 successful real estate transactions, an increase of 3 percent compared with the last month of 2015, according to the Housing and Real Estate Management Department under the Ministry of Construction.
The HoREA has acknowledged that the locality’s real estate price in 2015 rose from five to six percent compared with 2014, due to multi-selling channels in the sector that caused a “bubble” price in the market.
In order to restrict the negative impacts of the “bubble” price, HoREA suggested relevant State units study policies and mechanisms that will help the market grow sustainably and protect consumers’ rights.
Le Hoang Chau, Chairman of HoREA, said the number of secondary investors in 2015 accounted for about 15 percent, three times that of 2014. Up to 80 percent of them had to use loans with high interest rates, which pose high potential risks.
Nam Long Investment Joint Stock Company Board of Directors Chairman Nguyen Xuan Quang said the city’s real estate sector will prosper in 2016 due to an increase in the number of immigrants to the city. Business is booming for 50 to 70 sq.m apartments with selling prices of about one billion VND (45,000USD) per unit.
On the other hand, Le Huu Nghia, Director of Le Thanh Trading and Construction Limited Company, worried about the increasing speculation in the sector, which he said could hinder the market’s development.
HoREA executives said authorities should announce housing demand in order to help enterprises adjust their business strategies, and avoid oversupply.
They also said prolonged construction administrative procedures have increased construction costs, making consumers pay more for their apartments.-VNA
