Real estate market still feels economic pain

HA NOI (VNS)— The domestic real estate market is not showing signs of recovery and no one is sure when the situation will begin to improve, said industry and construction experts at a seminar held by the National Assembly Economic Committee on Wednesday.

The deputy head of the Central Institute for Economic Management (CIEM), Nguyen Dinh Cung, told the seminar that construction and property enterprises faced many problems, including accessing capital due to high interest rates, and a reduction in demand and purchasing power.

Cung said current credit loosening policies were inefficient in the short-term though the expansion and reduction of taxes for construction and property enterprises had temporarily eased difficulties.

Meanwhile, Mai Xuan Hung, head of the economic committee's trade and service sub-committee, said the market might not bottom out until 2014 and requested the Government to reduce inventory of building materials such as cement and steel.

According to Pham Chi Cuong, chairman of the Viet Nam Steel Association, property sector is to blame for 80 per cent of of the country's debts due to trillions of Vietnamese dong being ploughed into undeveloped projects.

In response, Tran Ngoc Hung, chairman of the Viet Nam Federation of Civil Engineering Association, said the state should not license enterprises to develop more property projects as many finished projects in HCM City had no buyers while many land areas had not been implemented in Ha Noi.

He added that the majority of capital should be for buyers and leasers, especially low-income people, while limited capital should be given to property enterprises.

Looking for signs of positivity, Sai Gon Co.op chairman Nguyen Ngoc Hoa said the construction sector should focus on producing affordable property projects due to sustained high demand for such products. By doing so, Hoa added that this would provide a chance to promote purchasing power on the property market as well as consumption of building materials such as cement and steel. — VNS

Source: http://vietnamnews.vnagency.com.vn/Economy/229874/real-estate-market-still-feels-economic-pain.html