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VNREA predicts further property price rises in 2016
Manh Tung
Wednesday,  Feb 17, 2016,20:59 (GMT+7)

VNREA predicts further property price rises in 2016

Manh Tung

By Manh Tung - The Saigon Times Daily

Vinhomes Central Park project under construction in HCMC offers many high-end apartments and villas for the market. VNREA has predicted housing prices would rise by 5-10% this year against 2015 - PHOTO: MANH TUNG

HCMC – The Vietnam Real Estate Association (VNREA) has projected a continued recovery of the real estate market this year, with prices seen rising by 5-10% against 2015.

The recent forex policy moves such as U.S. dollar-Vietnam dong exchange rate adjustment, dollar deposit rate reductions and anti-hoarding of foreign currency, as well as economic growth and falling inflation will place certain impact on the property market. Therefore, citizens and enterprises might use their domestic currency funds to invest in the property market, which is considered an attractive investment vehicle at present, VNREA said in a report.

This year, mid-end homes with prices of around VND1 billion a unit or higher remain attractive because they are affordable and meet the demand of many buyers.

Ngo Quang Phuc, deputy general director of Him Lam Land, said apartments priced at VND1.1-1.2 billion a unit would sell well this year. Enterprises will also develop high-class projects to meet demand of foreigners and overseas Vietnamese.

The commercial budget condo segment will continue growing but it would not steal the limelight as it depends on Government support. VNREA said supply would be as stable as in previous years.

Experts and businesses see the housing price increases of 5-10% as rational under the current business circumstances. There have been concerns over speculation, which may lead to stronger price hikes at certain projects.

This year, the property market is expected to draw more foreign investors seeking to capitalize on the revised laws on housing and property trading that came into force last year.

However, despite its recovery, the property market is still facing risks, especially of bad debt. Most realty businesses are sitting on bank loans with interest rates of over 10% per year. Besides, the market has yet to receive significant support in addition to the Government’s VND30-trillion credit package, VNREA said.

Many large real estate companies in HCMC have announced 2016 projects with each launching 1,000 to 3,000 apartment units. For instance, Hung Thinh Land will offer around 7,500 products, including 4,500 mid-end apartment units, 1,200 to 2,000 high-end units, and 1,000 land lots.

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