The seminar review and discuss the impacts of the government’s economic and monetary policies on the real estate market in recent times, particularly the effects of the implementation of measures to revolve difficulties for the real estate market according to the Government’s Resolution No.02/NQ-CP, dated 1 March 2013, as well as discussing and assessing the prospects for recovery of the real estate market in general and its segments such as housing, office, retail and tourism property in particular during the rest of 2013. Participants will include representatives from concerned ministries and agencies, economic experts, consultants, developers, investors and press agencies. Speakers include Mr Chris Brown – general director of Cushman & Wakefield; Mr Dang Huy Dong, Deputy Minister of Planning and Investment; Professor Nguyen Mai – former deputy chairman of the State Committee for Corporation and Investment and Professor Dang Hung Vo, former deputy minister of Natural Resource and Environment.
In the event, General Director of Cushman and Wakefield in Vietnam - Mr Chris Brown has presented the development outlook for Vietnam property market in 2013. Generally, the unmet demand of residential market and the oversupply of the current commercial market reflect the ineffective allocation of investment and the limitation of building design and management capacity. In the near future, when newly finished projects enter the stock, pricing and information transparency will be the key factors deciding the movement of the market.
To begin with, the office market, Ho Chi Minh City particularly, witnessed a consistently price dropping. In comparison with the peak time in 2008, the office renting price in the Vietnam Southern city has decreased more than 45%. In the next three years, at least an amount of one million square meters is expected to go on stock, putting landlords under much more pressure to lower the price. The year 2013 then is the year for customers to take full advantage of the oversupply market and enjoy much more brand new and hi-end skyscrapers.
On the residential market, grade B & C apartments dominate both HCMC and Hanoi in terms of availability while poor sales performance recorded on new condo projects. Meanwhile, re-sale market and landed property is stable. Developers looking for new ways to dispose of property including subdividing or apartment rentals etc. Therefore 2013 is expected to remain a buyer’s market and the downward pricing trend is will continue.
In the retail market, 1,500 new retail projects will be launching in the next 7 years across Vietnam. In 2012, Vietnam went off the list of 30 most attractive retail markets in the world (A.T Kearney). However Vietnam is still attractive to international retailers. Demand for retail space in the CBD is expected to remain high. However, due to the land limitation and high land price, the majority of future stock will be concentrated in the suburban area.
Commenting on the government’s recent economic and monetary issue, Chris Brown said: “The VND 30 trillion credit package bail out policy would assist developers being thirsty for capital and encourage them develop social houses for low-income people. And vice versa, low-income people will have the chance to buy an apartment, which then help increase total market demand and leverage the frozen property market” However Chris also emphasis that there would be difficulty in procedure as it will not be easy to carry out. Besides, it is not sure about the interest rate after three years of the loan, so the low-income buyers may be unable to pay the loan.
Meanwhile, Chris shows positive attitude on the establishment of The Vietnam Asset Management Company (VAMC) by the Government to handle bad debts held by credit institutions in Viet Nam: “The establishment of this company will help boost the resolution of bad debts. It is supposed to play an important role in controlling bad debts which is the main culprit for weak liquidity in the banking system”