About 30-40 percent of real estate projects should be closed to ensure abalance between supply and demand, according to the Ministry ofConstruction.
The ministry said that cutting realestate projects will reduce inventories and prevent land from beingwasted after unfinished projects have left the land fallow.
Deputy Minister Nguyen Tran Nam said that many developers do not have resources to complete their projects.
"Even if they do have the finance to implement the projects, the demand simply isn't there," he added.
In Hanoi alone, there are 720 licensed projects covering a totalarea of more than 300,000 hectares. It's estimated that these couldsatisfy demand until 2050.
The figures are alarminggiven the declining market and difficulties people are facing inaccessing credit, the ministry said, adding that without propermanagement, a scenario of a city full of unfinished projects can happen.
Nam said that allowing localities to decidewhich projects to cancel would cause problems because during the realestate boom, many of them had teamed up with enterprises on developmentprojects, causing a conflict of interests.
Mostlocalities proposed to revoke licences from just a few percent ofprojects, rather than the 30-40 percent that is needed to find abalance.
The ministry plans to set up a group in charge of checking, stopping and revoking real estate licences nationwide.
An expert said that the issue isn’t pressing because in the mediumterm, the market will not be flooded as investors are encountering cashflow difficulties.
He recommended simplifyingprocedures while allowing the construction of affordable housing for lowincome earners in order to reduce inventories.-VNA