Despite facing difficulties due to the State Bank of Vietnam’s monetary-tightening policies, Ho Chi Minh City-based Dat Xanh Group has still launched its products. Continuing its “Northward plan”, CEO of the group Luong Tri Thin introduced Dat Xanh’s Suoi Son Project in the southern province of Dong Nai. Reporter Luong Tuan interviewed Mr Thin on his assessments on the local realty market.
As a leading real estate firm in Ho Chi Minh City, Dat Xanh has continued expanding its business in the northern region. Which is more attractive to investors, the property market in Hanoi or in Ho Chi Minh City?
Ho Chi Minh City and Hanoi markets often show opposite developments, therefore, when looking at opportunities, investors should only base on certain periods. For example, two years ago, the Hanoi market was almost frozen; meanwhile, the south was very exciting, particularly in Binh Duong and Dong Nai provinces.
Over the past two years, this situation has been still seen in Hanoi and Ho Chi Minh City. However, in general, Hanoi’s realty market is more “bustling” than that in Ho Chi Minh City for the past recent years. Real estate prices in Hanoi have been on the rise, while, the price increases just occur in certain areas in Ho Chi Minh City.
Over the past six months, Hanoi realty market has witnessed the active trend. However, in my opinion, when the market reaches a certain level, it will move to another direction. A professional investor must define the market’s move to have suitable business strategies.
This time, you introduced Suoi Son project to investors in Hanoi. What do you expect in this “Northward plan”?
Besides Suoi Son project, Dat Xanh has invested in 37 projects, mostly located in the southern region, including Ho Chi Minh City, Dong Nai, Long An, Binh Duong and Ba Ria-Vung Tau. The firm targets segments with people’s real demand.
As you know, Vietnam now has more than 87 million people, including 65 percent of people aged below 35. The country has on the way to become a middle-income country from a low-income one. Thus, Dat Xanh’s strategy is focusing on the segment of real demand with apartments priced below VND1.5 billion and the segment of land valued at VND1 billion. With this investment strategy, we hope to offer opportunities for northern investors to own realty products of reasonable prices which are hardly found in Hanoi.
Real estate trading activities are often made based on rumours. How will your company offer the project in Hanoi?
Our policy is not selling one person, but we will carry out the trading activities clearly and transparently. The difference between Hanoi and Ho Chi Minh City markets is the way of sales. For Ho Chi Minh City, people can buy directly land and houses from investors at original prices not through any broker. We want to bring this serving style to Hanoi. We will make public the sale and prices of the products, aiming to sell our products to customers directly.
Credit growth in Ho Chi Minh City is now estimated at 49 percent with banks’ credit defined as the key role. With banks’ money-tightening policies, how will realty firms mobillise capital?
Currently, each enterprise has its own business strategy. In different periods, businesses have suitable methods for capital mobilisation. For instance, currently, most of companies do not get loans due to high interest rates, but issue bonds and seek capital from customers. Businesses also join hands with each other for technology, human resources and capital.
Marco-economic difficulties have also help to select qualified enterprises and eliminate weak ones.
Many experts said, to boost the realty estate market’s development amid the monetary-tightening policies, we should mortgage real estate at foreign commercial banks. What are your comments about this?
For the mortgage, we should take a comprehensive consideration. For example, when we buy houses in Singapore, sellers do not know anything about us as long as we have enough money to ensure 30 percent of the total payment in the first phase. At that time, a contract is signed between the buyer and investor. The contract is made carefully and after that, if the buyers are unable for the payments, the contract will be invalid. During the integration trend of the Vietnamese economy, Vietnam still lacks channels for capital mobilisation for the realty market’s sustainable development.
In the world, trust fund and realty credit funds have been long set up, but Vietnam does not have these. When the market reached a certain development level, to join the region and the world, I think that, it’s is necessary to mortgage real estate products at foreign commercial banks. This will be a channel for effective capital mobilisation when companies are short of funds.
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