Property market not to thaw anytime soon: experts

By Vu Le   July 30, 2023 | 03:14 pm PT
Property market not to thaw anytime soon: experts
Apartment blocks in the eastern part of Ho Chi Minh City. Photo by VnExpress/Quynh Tran
The property market will not recover this year because market sentiment is low, bank interest rates are high, legal issues linger, and economic recovery is sluggish, analysts have said.

Speaking at a talk show held by the Vietnam Association of Realtors (VARS), Nguyen Duy Thanh, CEO of BDS Joint Stock Company, said many property development companies only have directors and chairpersons left, and many others have closed down because of debts. To revive the market, the first thing that is needed is regaining customers’ trust.

Last year and the first half of this year, buyers faced shocks like products with dubious legality being sold in the market, outright fraud and sellers’ failure to honor commitments to subsidize buyers, he pointed out.

Bank loan interest rates should be cut to around 8% to enable people to get mortgages, and legal obstacles faced by property projects should be quickly resolved, he said. "The end of 2023 is too early to expect a thaw in the real estate market."

Tran Khanh Quang, CEO of Viet An Hoa Real Estate Investment Joint Stock Company, said buyers are indifferent now, and so developers and speculators would continue to reduce prices. "It is likely that the market will improve before showing clearer signs in 2024. This process will be slow."

Pham Lam, the association’s vice president, said there are too many challenges for the market to overcome, and so a recovery is almost impossible in the near future.

Nguyen Loc Hanh, CEO of Asia Gem Real Estate Investment Joint Stock Company, told VnExpress that liquidity is low and sentiment is weak, and so there are no signs it would recover in 2023.

He said the first driver of any recovery would be rapid public spending in sectors such as transport infrastructure and construction.

The second would be the issuance of policies to support businesses, promote efficiency and reduce unemployment.

The third would be a cut in policy interest rates to 5-6%, and of lending interest rates to 8-9%.

The fourth would be an improvement in the legal framework regulating the industry. "When these occur simultaneously, the real estate market is likely to recover."

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