VN ministry aims to promote a stable realty market
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HANOI - The construction ministry is drafting a project on management of the property market through six measures to support transparency and stability, Construction Minister Pham Hong Ha said.
Ha said at a meeting with devel-opers – held by the Vietnam Real Estate Association last week – that the property market in the first seven months of this year was stable and that no unusual developments were seen.
However, there were potential risks to which special attention must be paid.
The imbalanced developments in supply and demand of luxury projects and housing projects for low-income earners were a problem, he said.
The oversupply of the former and shortage of the latter had been forecast from the beginning of next year.
Vietnam needs 10 million square metres of social housing, but has only 30 per cent of that. There is also a severe shortage of housing projects for lease.
Promoting social housing developments would be the focus, and policies would be prepared to encourage developers to invest in this segment, Ha said.
The concentration of credit flow in high-end projects or a minority of developers was another risk, although outstanding property loans remained at a safe 8 per cent of total outstanding loans, he said.
Developers should tighten management of their own projects to ensure liquidity and be prepared for credit tightening policies. While there was some speculation in some projects, it had not become a widespread phenomenon.
The ministry would closely watch market developments to ensure sustainable growth and efficient and cost-effective use of resources, Ha said, stressing the importance of the real estate market in macroeconomic stability. Financial resources for property development played a key role.
“It’s time Vietnam eyed new capital sources such as from real estate investment trusts,” he said.
Capital for property development in Vietnam mainly comes from developers, banks and citizens.
In the draft, the ministry is seeking to prepare policies to accelerate the capital market for property development. Improving the transparency of the property market is also an important measure.
Ta Van To, general director of CEO Group, said the ministry should hasten the simplification of administrative procedures.
President of the Vietnam Real Estate Association Nguyen Tran Nam said detailed instructions for transactions in unfinished property projects were needed, together with tighter management to ensure compliance.
The construction ministry should work with other ministries and agencies to publicise areas where foreigners would not be allowed to buy houses or apartments. The association expects to work with construction authorities in building a database that was necessary to boost the development of the real estate market.
