Business  » Property

The HCM City People's Committee has approved a plan to buy up unsold residential buildings from real estate companies for its resettlement housing fund, said Le Hoang Chau, chairman of the HCM City Real Estate Association (HoREA) on February 17.

Chau said this could be a productive way to help warm up the frozen real estate market, especially the residential building sector.

However, many experts still predicted a gloomy future for real estate market this year at a meeting between HoREA and land development and real estate agencies the same day. Proposed solutions included lowering interest rates and developing financial tools through the Property Investment or Housing Funds to inject capital into the property market.

Vietnam 's monetary policy this year will continue to exclude non-production business activities, like real estate, from its list of priorities, Vice State Governor Nguyen Dong Tien affirmed on Feb. 15. Tien added that there would be some adjustment for property loan policy, promising that the State Bank of Vietnam will provide credit loans in 2012 to real estate projects with the potential to contribute to economic growth on a macro level.

Nguyen Manh Ha, director of the Ministry of Construction's Housing and Real Estate Market Department, told a steering committee on February 17 that the ministry has proposed two economical housing models for Vietnam , which will be long-term financial mobilisation channels for housing development in the country.

Vietnam 's residential property market is experiencing heavy losses at the moment.

Last year, the Prime Minister approved the establishment of a housing savings fund as a non-profit organisation with voluntary contributions from its members' monthly incomes.

Labourers in need of low-cost housing will be able to freely participate in the fund while contributing only 1 per cent of their monthly income. Once in place, the fund will prioritise lending to its members and construction firms that engage in social housing development programmes.

If participants no longer want to own a house, they can withdraw from the fund and have their contributions returned with 3-5 per cent interest per year.

Statistics from the Ministry of Construction also show that about 7 million people living in urban areas nationwide now are in need of low-income housing.