Only 20-30% of Vietnamese real estate firms are forecast to survive through the next year, said Vice Chairman of HCM City Real Estate Association Nguyen Van Duc.
Only 30% of real estate firms expected to survive through next year
Duc, who also serves as Deputy Director of Dat Lanh Real Estate Company, said “A range of idle property projects give proof of the sluggish real estate market, forcing many companies to sell them to other firms."
He added that solutions to save the market should have been made in 2011, and that now it is too late to improve the situation and the solutions presented this year will be ineffective.
“This year's VND30 trillion (USD1.42 billion) package from the government to save the property market has also failed to significantly change the situation. To date, only 2% of this package has just been disbursed,” Duc said.
He added that the Ministry of Construction has failed to accurately assess the market as well as cumbersome and complicated procedures facing companies in turning social housing projects into commercial housing projects.
Despite the package, people have been facing administrative procedures and other difficulties in getting loans through banks. They must provide proof of their assets, the value of their homes and income, among other requirements.
The Ministry has issued a circular to instruct the areas which are being converted from large apartments into small ones, but the procedures last between three and six months.
This year, for example, there has not been any social housing project in HCM City to come into operation. The period between approval of a project and its coming into operation remains a long one.
According to Mr. Duc, not only the prices of homes and land, but also prices of petrol, motorbikes and food play a factor. He added that tt is important to raise incomes as well as reduce property prices.
When undertaking estate projects, investors pay for building materials and other costs upfront, but in a fluctuating market it has been difficult for them to ascertain the worth of these projects in when finished, especially considering fluctuations in interest rates.
