Discount suggested a possible solution for crisis ridden real estate sector: Mr Phuoc
Discount suggested a possible solution for crisis ridden real estate sector: Mr Phuoc
Fleeing from the real estate market in the crisis three years ago, general director of Dinh Cao Cement Joint Stock Co, Nguyen Huu Phuoc, shared: “I understand the difficulties of enterprises presently, but these firms should not wait for the government’s rescue. Enterprises themselves should find solutions before it’s too late. The most practical solution is now to continue to discount”
Phuoc confided when fleeing from the real estate market in 2009, his firm also suffered so many damages. So far there have been still outstanding projects. But fortunately, his firm has avoided more severe crisis later.
According to Phuoc, real estate prices have fallen quite sharply (20-35%) during the past time, but due to low incomes, people still can not afford to buy house. With high inventories volume currently, selling on the cheap to get money back is still better than remaining high inventory situation that may lead to the bog. Therefore, the investor should actively discount and give supports for home buyers to regain customer’s confidence.
Phuoc suggested that real estate association can propose the government to reduce taxes, apply preferential interest rates for home buyers, combine with the investors to actively discount to better support customer and help improve the market liquidity.
At the 39th real estate night, former deputy director of the Market Price Institute (Ministry of Finance), Vu Dinh Anh, analysed although it is not easy to discount real estate, depending on the circumstance, enterprises still have to accept dumping products if it is deemed necessary.
According to Anh, the biggest concern of investors in this moment is how to solve the inventories. Therefore, promotion and competition policies on price, discount, and sell off or dumping is very normal. Anh also advised weak real estate companies should not be embarrassed when fleeing from the market. Even actively switching to more appropriate sectors is sometimes a wise decision.
“Do not kick out the discounts in real estate but regarding it as a solution for finding escape. I personally favour some investors who strongly reduced apartment prices since this shows enterprises actively remove the deadlock for themselves” said Anh.
While many people said that the discount of real estate prices is the final way, Ministry of Construction (MoC) is preparing many solutions to support the real estate market. At the seminar to revive the real estate resources held in late May, deputy minister of construction, Nguyen Tran Nam, admitted the real estate market is facing numerous difficulties and it needs urgent solutions.
The solution package offered by MoC includes proposal to add some projects and realty companies in the Resolution No 13 and bringing some property transactions into the exemption and reduction of value added tax (VAT).
Nam’s point of view is that enterprises must attempt to save themselves by restructuring products, rebuilding cost strategy consistent with the affordability of the majority of people. “Businesses should not wait for the state’s policies but actively involve in proposing solutions to revive the market” Nam stressed.
According to Nam, this crisis stems from the unplanned development of real estate market in the past time and lacking of control, resulting in an imbalance of financial resources. In particular, there is a part of causes from businesses because they did not control cash flows, did not use capital in right purposes, lacked market research and offered unsuitable products
VnExpress
