Many investors have begun to launch their products after a long frozen time for the property market. Purchasing power has slightly increased. This is an immediate effect resulting from the interest rate cut by banks.
ThuDuc Housing Development Joint Stock Company (ThuDuc House) is going to sell 262 apartments of the Truong Tho project at the minimum price of $1.000 per square meter. Similarly, the Sai Gon Thuong Tin Real Estate Joint Stock Company (Sacomreal) plans to sell 200 luxury apartments in the District 2. Several investors like Phu My Hung or Tan Binh Real Estate Company attracted many customers in order to sell apartments.
Concerning brokerage, the number of property-related transactions increased sharply after Tet holidays. Lam Van Chuc, director of the Phuc Duc Real Estate Company, said that the number of people that bought properties last week via the company tripled. Luong Tri Thin, director of the Dat Xanh Real Estate Service & Construction Corporation, also said that, during the last five days, the company received about 200 people each day who asked for information about land plots at the My Phuoc urban area, in southern Binh Duong Province.
“On average, we sell about 40 land plots in the My Phuoc 3 urban area per day," Thin said. "The return of investment of the real estate sector happens much sooner than expected.”
Some property agencies in streets such as Tran Nao (District 2), Hoang Dieu (District 4), or Le Van Luong (District 7) told that many customers came to ask information for buying houses.
In Hanoi, according to a DiaOcOnline’s survey, the customers also began to return to the property market, especially for projects which are going to be finished and handed over. The Ha Dong area is currently prospering. Land plots prices in the Ngo Thi Nham residential area (Ha Dong) this week were transacted at VND25 million – VND28 million per sq/m, much higher than the previous month (VND22 million per sq/m and without customer).
Giving explanations about this, Nguyen Vu Bao Hoang, director of ThuDuc House, said that this is the consequence of the fact that banks decreased the interest rates too low. Depositors do not receive attractive profits any longer, while the domestic securities market shows no signs of recovery. Therefore, many people decided to shift their savings to the real estate sector,” Hoang analyzed.
Tran Xuan Tung, an investor in the District 3, said that, with the current 7 percent deposit rate, he can earn a maximum VND21 million a year if he keeps VND300 million into a bank. According to him, this sum of money, even combined with more borrowing from his relatives, still can’t afford to buy a 70-square-meter apartment in this area.
However, according to Nguyen Ngoc Duong, chairman of the managing board of Viet Five Stars Joint Stock Company, the property investors should be cautious because we have to wait until the second quarter of this year to determine whether the market is really warm or not. Moreover, at that time, Construction Ministry’s plan to build 10.000 low-cost apartments, polices of tax delay, and interest rate decrease will be partly clearer.
Cheap houses are still on paper
Last week’s most prominent information was that the Ministry of Construction suggested again that the Government is considering the capital investment mechanism to build social housing for low-income earners.
Nguyen Tran Nam, deputy minister of the Construction Ministry, answered to DiaOcOnline that VND6.000 billion will be invested immediately and, from 2009 to 2010, there will have about 24.000 low-cost apartments for sale. On the next period of 2011-2015, about VND17.400 billion will be invested to build nearly 70.000 apartments. As a result, thousands of low-income earners will have the opportunity to buy cheap houses only within the next 6 years.
The Ministry of Construction also suggested a series of preferential policies for enterprises who participate in building social housing, such as exemption from land use charges, applying coefficient of land use higher compared to regulation, exemption from value-added tax, or tax from enterprises’ revenues. Nguyen Tran Nam, deputy minister, said that if all policies are simultaneously applied, each square meter will be only sold at the price of VND5 million – VND6 million. A 50-square-meter apartment will be sold at VND250 million – VND300 million.
However, in reality, implementing low-cost housing projects for workers and low-income earners is very slow. A pilot project of building 800 apartments for lease and for sale (funded by the State budget), being implemented from the middle of 2007 and expected to be completed in 2010, is facing delays : up to now, infrastructural design isn’t ready yet. Many continuous changes and proposals made the Ha Noi Department of Construction very confused.
Nguyen Hiep, chairman of Housing & Urban Development Corporation (HUD), said that many social housing projects have been slowly implemented because preferential policies for the enterprises who invest in them aren’t so attractive yet. The investors still have to pay land use charges and site clearance compensation equal to luxury housing projects, while selling prices of these houses are lower. Moreover, infrastructural weakness of low-priced apartment buildings is also an obstacle in attracting the residents living in these areas.
Dang Hung Vo, Associate Pro. Dr., deputy minister of Department of Natural Resources and Environment, told that if the Government spends a big sum of money to build houses for low-income earners, it would be an strong impetus for the property market. But Vo doesn’t approve that special treatments are only given to the investors. “There are indirect favors but not enough to solve housing problem for low-income people. It’s necessary to develop more specific policies to support people who have demand of buying houses,” Vo said. According to him, the low-priced housing market will be able to prosper only when people having housing demand will be supported by direct and effective financial policies.
ThuDuc Housing Development Joint Stock Company (ThuDuc House) is going to sell 262 apartments of the Truong Tho project at the minimum price of $1.000 per square meter. Similarly, the Sai Gon Thuong Tin Real Estate Joint Stock Company (Sacomreal) plans to sell 200 luxury apartments in the District 2. Several investors like Phu My Hung or Tan Binh Real Estate Company attracted many customers in order to sell apartments.
Concerning brokerage, the number of property-related transactions increased sharply after Tet holidays. Lam Van Chuc, director of the Phuc Duc Real Estate Company, said that the number of people that bought properties last week via the company tripled. Luong Tri Thin, director of the Dat Xanh Real Estate Service & Construction Corporation, also said that, during the last five days, the company received about 200 people each day who asked for information about land plots at the My Phuoc urban area, in southern Binh Duong Province.
“On average, we sell about 40 land plots in the My Phuoc 3 urban area per day," Thin said. "The return of investment of the real estate sector happens much sooner than expected.”
Some property agencies in streets such as Tran Nao (District 2), Hoang Dieu (District 4), or Le Van Luong (District 7) told that many customers came to ask information for buying houses.
In Hanoi, according to a DiaOcOnline’s survey, the customers also began to return to the property market, especially for projects which are going to be finished and handed over. The Ha Dong area is currently prospering. Land plots prices in the Ngo Thi Nham residential area (Ha Dong) this week were transacted at VND25 million – VND28 million per sq/m, much higher than the previous month (VND22 million per sq/m and without customer).
Giving explanations about this, Nguyen Vu Bao Hoang, director of ThuDuc House, said that this is the consequence of the fact that banks decreased the interest rates too low. Depositors do not receive attractive profits any longer, while the domestic securities market shows no signs of recovery. Therefore, many people decided to shift their savings to the real estate sector,” Hoang analyzed.
Tran Xuan Tung, an investor in the District 3, said that, with the current 7 percent deposit rate, he can earn a maximum VND21 million a year if he keeps VND300 million into a bank. According to him, this sum of money, even combined with more borrowing from his relatives, still can’t afford to buy a 70-square-meter apartment in this area.
However, according to Nguyen Ngoc Duong, chairman of the managing board of Viet Five Stars Joint Stock Company, the property investors should be cautious because we have to wait until the second quarter of this year to determine whether the market is really warm or not. Moreover, at that time, Construction Ministry’s plan to build 10.000 low-cost apartments, polices of tax delay, and interest rate decrease will be partly clearer.
Cheap houses are still on paper
Last week’s most prominent information was that the Ministry of Construction suggested again that the Government is considering the capital investment mechanism to build social housing for low-income earners.
Nguyen Tran Nam, deputy minister of the Construction Ministry, answered to DiaOcOnline that VND6.000 billion will be invested immediately and, from 2009 to 2010, there will have about 24.000 low-cost apartments for sale. On the next period of 2011-2015, about VND17.400 billion will be invested to build nearly 70.000 apartments. As a result, thousands of low-income earners will have the opportunity to buy cheap houses only within the next 6 years.
The Ministry of Construction also suggested a series of preferential policies for enterprises who participate in building social housing, such as exemption from land use charges, applying coefficient of land use higher compared to regulation, exemption from value-added tax, or tax from enterprises’ revenues. Nguyen Tran Nam, deputy minister, said that if all policies are simultaneously applied, each square meter will be only sold at the price of VND5 million – VND6 million. A 50-square-meter apartment will be sold at VND250 million – VND300 million.
However, in reality, implementing low-cost housing projects for workers and low-income earners is very slow. A pilot project of building 800 apartments for lease and for sale (funded by the State budget), being implemented from the middle of 2007 and expected to be completed in 2010, is facing delays : up to now, infrastructural design isn’t ready yet. Many continuous changes and proposals made the Ha Noi Department of Construction very confused.
Nguyen Hiep, chairman of Housing & Urban Development Corporation (HUD), said that many social housing projects have been slowly implemented because preferential policies for the enterprises who invest in them aren’t so attractive yet. The investors still have to pay land use charges and site clearance compensation equal to luxury housing projects, while selling prices of these houses are lower. Moreover, infrastructural weakness of low-priced apartment buildings is also an obstacle in attracting the residents living in these areas.
Dang Hung Vo, Associate Pro. Dr., deputy minister of Department of Natural Resources and Environment, told that if the Government spends a big sum of money to build houses for low-income earners, it would be an strong impetus for the property market. But Vo doesn’t approve that special treatments are only given to the investors. “There are indirect favors but not enough to solve housing problem for low-income people. It’s necessary to develop more specific policies to support people who have demand of buying houses,” Vo said. According to him, the low-priced housing market will be able to prosper only when people having housing demand will be supported by direct and effective financial policies.
Le Dinh - Rol.vn
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