Friday, 2 March 2012

Real estate market likely to recover later this year

HA NOI — The domestic real estate market was expected to recover in the second half of this year but the recovery will only occur in some segments of the sector, said an official of the House and Real Estate Market Management Department.

Vu Xuan Thien, deputy head of the department under the Ministry of Construction, forecast that in the second half of this year, the market would see a recovery in low and medium-price apartments as well as villas and houses located in suburban regions at reasonable prices.

According to Thien, the second half of the year will be good time for the people to buy property at reasonable prices.

Surges in housing and property prices were less likely, he said.

The existing challenges faced by the property market would remain in the first half of this year, he said, due to the impacts of policies on curbing inflation and stabilising the macro-economy.

Trading activities on the domestic property market had almost stopped, he said, as prices were still extremely volatile. The market had failed to focus on projects that met the people's demand, especially houses and apartments for rent. Construction of housing or apartment projects were progressing slowly.

Thien said the existing difficulties experienced by the domestic property market were largely a result of a lack of timely guidelines from authorities.

In addition, some property development and trading companies who lack professionalism and adequate financial sources were complicating matters, he said.

Le Thien Linh, head of the General Management Division of LILAMA Joint Stock Company, said difficulties in securing capital had forced his company to focus on manufacturing and construction in stead of property, which had been one of the company's non-core businesses during the past few years.

Meanwhile, few property companies have large enough sources of capital to finance their projects.

Le Thanh Than, director of Lai Chau Private Construction Company, said his firm was an exception.

The company had enough funds for its property projects as it did not rely on banks, said Than, instead using funds from its hotel and tourism businesses to invest in property development. — VNS


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