The real estate market’s recovery will be led by low-cost housing and land plot segments this year, according to market analysts.
They say their assessment is based on rising demand for these kinds of properties and the government’s recent changes of policies encouraging development of these market segments.
The prolonged economic slowdown has seen a sharp fall in demand for luxury homes. Also, increasing competition in this segment has seen many developers shift their focus to affordable homes so as to meet market demand and diversify their risk.
There is a huge gap between demand and supply of low-cost homes. By 2015, the total housing shortages in urban areas is estimated at 891.8 million square metres, more than three-fourths of which will in the low-income segment.
To meet the market demand and help real estate developers settle their inventory problem, ministries and sectors have started implementing several new policies, particularly supporting development of the low-cost housing segment.
One of them is the Ministry of Construction’s Circular No 02/2013, which allows enterprises to change the apartment structure of commercial housing projects to make them more affordable.
Other policy incentives include a decision to set up a Real Estate Investment Trust (REIT) this July that would, according to Deputy Construction Minister Nguyen Tran Nam, help mobilise idle money from society and ease the current capital shortage in the real estate market.
These policies have been welcomed by both individuals and enterprises because changing the apartment structure creates more opportunities for low-income earners to buy apartments, while the trust fund will help developers mobilise much needed capital for their projects.
However, the main catalyst in reviving the local real estate market is likely to be the recent cuts in lending rates, experts say.
Dang Hung Vo, former Deputy Minister of Natural Resources and Environment, said the lower lending rates would have an impact on people who really need houses to live in as opposed to making speculative investments.
There would be more people who want to take advantage of this opportunity and withdraw their savings from banks to buy houses, he said.
Many commercial banks have already lowered the deposit interest rates to around 7.5 percent per year, suggesting that lending rates could drop to 10 percent per year as the central bank expects.-VNA
They say their assessment is based on rising demand for these kinds of properties and the government’s recent changes of policies encouraging development of these market segments.
The prolonged economic slowdown has seen a sharp fall in demand for luxury homes. Also, increasing competition in this segment has seen many developers shift their focus to affordable homes so as to meet market demand and diversify their risk.
There is a huge gap between demand and supply of low-cost homes. By 2015, the total housing shortages in urban areas is estimated at 891.8 million square metres, more than three-fourths of which will in the low-income segment.
To meet the market demand and help real estate developers settle their inventory problem, ministries and sectors have started implementing several new policies, particularly supporting development of the low-cost housing segment.
One of them is the Ministry of Construction’s Circular No 02/2013, which allows enterprises to change the apartment structure of commercial housing projects to make them more affordable.
Other policy incentives include a decision to set up a Real Estate Investment Trust (REIT) this July that would, according to Deputy Construction Minister Nguyen Tran Nam, help mobilise idle money from society and ease the current capital shortage in the real estate market.
These policies have been welcomed by both individuals and enterprises because changing the apartment structure creates more opportunities for low-income earners to buy apartments, while the trust fund will help developers mobilise much needed capital for their projects.
However, the main catalyst in reviving the local real estate market is likely to be the recent cuts in lending rates, experts say.
Dang Hung Vo, former Deputy Minister of Natural Resources and Environment, said the lower lending rates would have an impact on people who really need houses to live in as opposed to making speculative investments.
There would be more people who want to take advantage of this opportunity and withdraw their savings from banks to buy houses, he said.
Many commercial banks have already lowered the deposit interest rates to around 7.5 percent per year, suggesting that lending rates could drop to 10 percent per year as the central bank expects.-VNA
