Real estate firms told to ‘find their own way'

Real estate firms told to ‘find their own way'

Property companies must find their own way out of the property market slump, a conference heard in HCM City yesterday.

"This the first time that prices have fallen during a real estate market freeze," Dang Hung Vo, former deputy minister of Natural Resources and Environment, said.

"There is no common solution for all companies.

"To escape, they must find their own way and restructure to improve their competitiveness."

He listed some paradoxes that distort the market. He said the first was the mismatch between demand and supply.

While he and also other participants agreed that both demand and supply were high, he said unfortunately the supply was in the high-end segment and the demand in the low-end market.

The other problem is the big gap between incomes and average prices, he said.

"In Viet Nam, the average price of a house is about 25 times the annual income of people.

"In other regional countries, it is only two to four times."

He blamed this on bad management and tortuous policies.

There are multiple laws governing the real estate market — such as the Real Estate Law, Land Law, Housing Law, and Price Law – and they are often contradictory but not amended, he pointed out.

Another reason preventing a market revival is the lack of trust among potential buyers.

Huynh Anh Dung of the Leader Real International Training Academy said: "Customers wait for prices to fall further.

"Moreover, they do not trust developers since many could not keep their earlier promises."

To liquidate the huge housing inventory, he suggested throwing open the market to Viet Kieu (Overseas Vietnamese).

"Many other countries allow this and so should Viet Nam," he said.

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