Ministry delays plan for property market
Ministry delays plan for property market
The Ministry of Construction (MoC) has proposed to delay the submission of a development plan on foreign direct investment for the real estate industry to the Government until August at the Prime Minister's request.
So far, the ministry said, some ministries and 18 cities and provinces had not yet sent in reports on developing FDI for the property industry, including the ministries of Justice, Finance, Planning and Investment, the State Bank of Viet Nam, Ha Noi and HCM City.
Therefore, the ministry could not complete the plan on improving investment quality, State management, efficiency and orientation of foreign direct investment to the real estate industry by 2020 and submit the plan to the Prime Minister in May as required.
Additionally, in January, the ministry sent an official letter to 350 enterprises, asking each to report on implementation of their foreign invested projects in the property industry. However, the ministry has received feedback from only 54 firms.
The Ministry of Planning and Investment (MPI) said that FDI for the property industry this year was expected to reduce against previous years. During 2008-10, FDI accounted for 34 per cent of the total amount poured into Viet Nam, but accounting for only 5.8 per cent in 2011.
In 2010, the country attracted US$6.84 billion in foreign investment to the real estate industry, accounting for 36.8 per cent of total FDI while last year, the nation lured $845.6 million to industry, the MPI said.
However, this year is expected to see an increase in FDI to the property industry because during the first four months of the year, the industry attracted $1.57 billion, of which, $1.2 billion was pumped into the Binh Duong New City project in southern Binh Duong Province.
FDI would reach the property industry via the merger and acquisition (M&A) of real estate projects that experienced financial resource difficulties, experts said.
The wave of M&As in the property market was expected to develop in the coming time because of difficulties in liquidity face by construction firms, according to property service provider CBRE Viet Nam.
For property sellers, current prices were at a low rate, but for investors or buyers, such figures would be a good chance for them to purchase property at real prices, CBRE Viet Nam said.
Such factors would boost the volume of FDI to the property industry this year, CBRE Viet Nam Managing Director Marc Townsend told Vietnam Investment Review.
SP Setia Bhd, one of the largest property firms in Malaysia, has sought investment opportunities in Viet Nam's real estate market, Alex Loh, head of SP Setia Representative Office in Viet Nam, also told the paper.
Many property investors, especially those in the domestic market, who had great difficulty in financial resources, have sought partners to develop projects, he said.
The property market has different development periods, said Loh, adding that now, it faced difficulties in capital and trading activities, but in the long term, would still be considered a potential investment destination.
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