With a sharp increase in realty prices in Hanoi in the recent time,, many experts said, the Vietnamese real estate market is now at the peak of price storm. It is speculation that has led to the situation and this is said to be a risk for the national economy.
A super-profit business area
Realty business in Hanoi is considered as a super-profit business area. Over the past three months, apartments in Ha Dong and Trung Van areas are sold with a disproportion of between VND13-VND14 million per square metre compared to the original price.
The land segment is the most exciting in the Vietnamese realty market now, drawing attention of speculators as well as people who have real demand. Therefore, land prices are pushed to very high levels. In An Khanh and Van Canh, price of a 50-m2 land plot are higher hundreds of millions of VND than the previous week.
The realty storm also pushes land and housing prices in quiet areas like Thanh Tri and Gia Lam. The realty price hike is created by different ways, particularly the rumors about the limited supply sources. And real estate has become a speculation channel, not investment channel. This explains why hundreds of people queued to buy Duong Noi apartments invested by Nam Cuong Group.
The land demand is a fact; however, only speculators know how it is? When measures to realty stabilisation are evaded and avoided by speculators, people who have real demand still suffer from the greatest disadvantages. More than ever before, have they found it difficult to buy apartments at original prices
.
Under regulations, when investors are assigned with projects, they meet enough conditions to borrow banks’ loans. Individual investors are only allowed to mobilise and contribute capital only when the construction of bottom land and foundation is finished.
Therefore, when investors do not intend to borrow from banks, they seek capital through brokerage companies to ink capital contribution contracts. According to the Hanoi Construction Department, most of realty projects in the city are carried out through capital contribution contracts. The official transfer contracts will be signed after infrastructure construction is completed. As a result, brokerage firms will continue capital mobilisation from other customers.
In reality, current capital contribution contracts inked by companies and individual investors are attached to location and area of apartments. The contracts are often transferred to the third and fourth side right after that.
It is due to unclear realty contracts, concerned agencies will find it difficult to deal with the possible disputes.
Bad impacts on national economy
According to economists, monetary stabilisation policies by the State Bank of Vietnam’s from now to the year-end will affect the realty capital flow in the coming time. The latest statistics figures showed that outstanding loans has increased by 2.04 percent in October compared to September and 33.29% against December 21 last year.
Due to the increase of outstanding loans in the remaining months, the state bank has worked out measures to limit lending in some sectors, including real estate. However, these measures have caused the realty market to become frozen after the market shocks. Buyers are still afraid of high prices, while the buyers do not want to sell their houses and land at low prices. Besides, problems arising from unclear transactions will make people more worried.
Speculation the realty sector will bring bad effects for the national economy. A question is that what are the roles of state management agencies to control the market?
Luong tuan
Vietnamese
