Real estate market in Vietnam expected to further revive

Ho Chi Ming City – The country’s World Trade Organisation (WTO) accession and the fast development of the stock market has helped revive the real estate market in Vietnam, according to industry insiders.

Do Thi Loan, general secretary of the HCM City Real Estate Association (HoREA), said the local property real estate market showed signs of picking up after Vietnam became an official membership of the WTO in January.

Independent real estate market watchdogs said the number of real estate purchases in the last quarter of 2006 increased more than 20 per cent over previous quarters. On the first days of the Lunar New Year, transactions at local real estate companies picked up dramaticaclly, they said.

Vo Dinh Quoc, deputy director of the Asian Commercial Bank’s Real Estate Company, said the company recently concluded a real estate transaction worth up to VND 100 billion (US $6.25 million) on the first working day of the real estate company in the new year.

A representative of the Phu My Hung joint venture in Sai Gon South also revealed that the real estate company had to refuse hundreds of potential customers as they expressed their wish to buy real estate apartments.

“Most of these customers are ready to pay in cash to buy our apartments, but we have no more,” he said. A similar situation was also seen as many other apartments trading companies.

Luu Thanh Huong, director of the Linh Phong Real Estate Construction, Investment and Development Company, said: “We have sold out about 1,500 real estate apartments and houses located in residential areas on District 7’s Nguyen Van Linh Street.

“This year along, we plan to build 700 more apartments of different kinds to fill customers’ orders,” Huong said.

The prospect of WTO membership has inspred new waves of foreign investment and has revived the dormant property real estate market in Vietnam. Experts said investors’ concerns over the country’s legal system and stability of the business environment have begun to dissipate recently.

As most real estate activities often require a great deal of capital, investors in real estate want the Government to ensure that their investments are protected. WTO membership will require that international trade rules be followed, they said.

Trade Minister Truong Dinh Tuyen said at a recent press conference WTO accession proved that the country’s doi moi (renovation) had been recognized by the international community. Tuyen said that institutional reforms and revamped real estate legal system have been the renovation process’s most significant achievements.

Foreign real estate investment experts have said that the Government’s recent politics on foreign investments, particularly in terms of property and housing, have encouraged more investors to do business in Viet Nam.

Loan of the HoREA said that her association had received more than 20 delegations representing major real estate companies from countries and territories including South Korea, the US, Australia, mainland China, Singapore, Hong Kong and Taiwan.

Most were very interested in real estate property trading in VietNam, particularly in big cities like HCM City, Loan said. Office buildings, luxury apartments, shopping centres, and housing for low-income earners were the primary interest, she said.

“there have been several memoranda of understanding and business contracts signed between Vietnamese and foreign property enterprises during the HoREA visits.”

Loan and other real estate market experts have the same view that the strong development of the domestic stock market, with many people earning high returns within a single day, has also contributed to the recovery of the real estate sector in Vietnam.

“Many of these people flocked to invest in the property market. This change has provided the real estate market in Vietnam with a new source of potential customers,” she said. Loan also predicted that the domestic property market will change as the government allows Viet kieu (overseas Vietnamese) to participate in the property market.

Quoc from the ACB said tha thte governemtn should issues policies allowing domestic investors to transfer their property projects to foreigners and simplify the property-related procedures.

Tran The Ngoc, director of the HCM City department of Natural Resources and Environment, said the city would adjust real estate property trading and management policies in ways that would make the local market develop, and encourage foreign and domestic investments in real estate. - VNS