Property market to recover in near future
Property market to recover in near future
The property market expects to see more recovery by this year end and beyond due to positive business results on the market in the first half of 2014, said experts.
According to a recent report on the local real estate market in the first half of this year released by the Ministry of Construction, the market had more positive developments than the same period of last year with a strong increase in transactions of small and medium-scale houses with medium prices. Some developers that had stopped constructions temporarily have restarted their housing projects.
The ministry said supply of apartments in large cities like Ha Noi and HCM City had increased and transactions of social apartments with medium selling prices had surged, reported the Xay dung (Construction) newspaper.
The report said that in the first half of this year, Ha Noi had 4,000 successful transactions on the property market, doubling against the same period of last year, while HCM City also saw a positive situation in property transactions, especially apartments with a price at VND15 million per sq.m.
Real estate projects had seen 50 to 80 per cent successful transactions via property trading floors, the report said.
Therefore, the ministry said, the local real estate market at present still had many challenges but it was really warmer.
However, the recovery on the local property market would be slow in the future, said experts.
According to Tran Kim Chung, Deputy Head of Central Institute for Economic Management, the local property market may not see change at present, but it has the potential to get better and this can happen quite easily.
On the other hand, the market will start a full circle of development if Viet Nam succeeds in negotiations over the Tran Pacific Partnership agreement and maintains stability in macro economy.
Pham Duc Toan, Director of EZ Viet Nam Company, said the property market has a short circle and some instability. But in future, the local market would enter a new circle with longer stability within 10 years. The market would be brighter within the next 1-2 years.
Meanwhile, Neil MacGregor, Managing Director of Savills Viet Nam, a foreign property service and consulting provider in Viet Nam, said the country's real estate market was at an attractive phase in its development having recently bottomed out and shown some encouraging signs of recovery.
The HCM City office and residential markets in particular, were starting to demonstrate a better balance between supply and demand. Whilst this had not yet resulted in significantly increasing rentals or residential prices, Savills expected this to occur in the second half of 2014 and into 2015.
Whilst Viet Nam is at the bottom of its real estate cycle, many other Asian markets are at the top and may be set for a downturn over the next few years, according to Savills. Viet Nam is therefore attractively placed for investors to take advantage of the market recovery, as other markets begin to cool.
In addition, the current investment trend is focusing on the following sectors: office, hotel, and residential. Within the office sector, the HCM City market is seen to have bottomed out with rents starting to pick up. Investors are therefore focusing on operating office buildings with stable cash flows.
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