The real estate market in Ho Chi Minh City is fast developing but still not worth the price.
HCMC Real Estate Association (HoREA) said that in 2017 real estate in HCM City really developed. But it’s not worth the potential. There are still obstacles to the market.
For this market to develop further, the need to take measures to remove the magnet stick to the market. Restraining the development of real estate in the city.
According to the annual report on the real estate market in Vietnam. HoREA said that the real estate market in Ho Chi Minh City is still not transparent, unhealthy, unstable and many other obstacles bundled.
In particular, the settlement of administrative procedures is a key issue. Being in the process of applying for procedures has many shortcomings. For new business leads to the phenomenon of “holding the lights in front of the car”. If the waiting process is completed, the opportunity to catch the market will lose.
This situation makes it difficult for enterprises to access the market. Makes the market at times too redundant, at times lack of projects. The quick resolution of this problem, shortened administrative procedures and simple. There will be opportunities for businesses as well as healthy market development, sustainability, …
The procedure is not all but the mechanism and the law
Another HoREA “stone” found that it was the procedure to transfer real estate projects. At present, the laws require transfer of land, the enterprise must have a certificate of land use right.
While there are mortgages as collateral for bank bad debts, none of these projects have this certificate. This has kept the new entrants from implementing the project, restarting the project.
This makes the real estate business difficult in the M & A of its land fund. At present, there are 500 projects in the city that are “projected” to wait for new investors to re-deploy.
But because of administrative procedures as well as current law too difficult. So the market last year only 27 projects were named new investors and redeveloped.
Next to “stone” land use fees. This is the reality that is creating the mechanism of asking for the market. Make the business extremely difficult to implement the project. The last loser is the buyer. No one else is the people, the workers.
Besides, ground clearance is also a problem in Ho Chi Minh City. It makes the projects are in time for compensation, compensation in progress. And still make the projection for a long time without a solution
Finally, the “stone” of credit policy is not suitable, not create medium- and long-term capital for the real estate market. People want to buy real estate still have to bear high interest rates. It is not easy for the first time buyer to borrow money.
Because of this problem, the segment of cheap housing almost did not appear on the market in HCMC in 2017. Because buyers of this segment mainly earn 10 million or less. But with that revenue, the bank does not lend and does not have access to a commercial credit package.
Development cooperation is a new and indispensable trend
According to HoREA, in 2018, the real estate market will have recombined products to avoid the situation of demand-supply phase as last year. And let the market grow healthier, more transparent to help low-income people also own a home.
However, the biggest and most significant change of 2018 will be the cooperation between businesses both domestic enterprises and domestic and foreign.
Mergers, mergers and acquisitions will be busier in 2018. This will help to restart projects and screen the market.
Typically, handshakes in late 2017, which is the deal of Nishi Nippon Company and Hankyu (Japan) in cooperation with Nam Long. To develop the Mizuki Park Residential Project in Binh Chanh District, HCMC. With a total investment of nearly $ 400 million on an area of 26 hectares.
Also noteworthy is that, on December 24 Mitsubishi Group has poured capital into Phuc Khang Investment and Construction Corporation (Phuc Khang Corporation). To develop a green space housing project in HCMC
This is the Diamond Lotus project, the first residential project in Vietnam built, managed and operated according to the LEED standard (USGBC – United States). An American standard has appeared in 150 countries around the world and is the first in Vietnam.
The first two investments were disbursed in January. Worth more than $ 30 million for Diamond Lotus Riverside project in District 8, Ho Chi Minh City.
These are typical projects of cooperation between businesses. And there are also projects that play the role of “gunshots” that open up new trends. Trends will push the real estate development in the future.
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