Property market stable in April

The real estate market was stable in April, as several developers of high- and middle-end projects slightly lowered prices to speed up sales, according to a new Ministry of Construction report.-Photo chinhphu.vn

The report shows that successful transactions were mainly middle-end projects nearing completion, with good infrastructure.

In Ha Noi and HCM City, housing prices were stable, but several projects recorded mild price drops as developers wanted to boot sales, the ministry said.

Ministry data estimate realty market inventories at nearly VND28.4 trillion (US$1.25 billion) as of April 20, a drop of 8.55 per cent since the end of 2016. The inventory includes many lots far from downtown areas, where infrastructure is underdeveloped.

According to Le Hoang Chau, president of HCM City Real Estate Association, the property market currently shows no signs of a bubble. Chau noted that five factors are needed to form a bubble: an overheating economy, loosened credit management, imbalance between demand and supply, rising speculation and negligence of management agencies. “I see no risk of a bubble in the overall realty market, but there is an intensifying heat on land,” Chau said.

Some areas in HCM City recorded price increases of 30-40 per cent, or even up to 100 per cent in land prices since last year. Chau said development of infrastructure and announcements or rumors about mega projects were pushing up prices of nearby land unreasonably in some areas, such as District 9, Nha Be, Binh Chanh, Cu Chi in HCM City. "Attention should be paid to whopping rises in land prices,” Chau said, warning buyers to be cautious about their investments.

Nguyen Hoang Minh, Deputy Director of the State Bank of Viet Nam’s HCM City branch, said credit policies for the real estate sector were more cautious to prevent a bubble.

Experts also urged buyers of unfinished housing projects to study the projects’ legality carefully before making decisions, especially certificates of eligibility for transactions and bank guarantees.

According to Pham Gia Hoa from HCM City Department of Natural Resources and Environment, management agencies should announce which projects are eligible for transactions.