The real estate market’s recovery will be led by low-cost housing andland plot segments this year, according to market analysts.
They say their assessment is based on rising demand for these kinds ofproperties and the government’s recent changes of policies encouragingdevelopment of these market segments.
The prolongedeconomic slowdown has seen a sharp fall in demand for luxury homes.Also, increasing competition in this segment has seen many developersshift their focus to affordable homes so as to meet market demand anddiversify their risk.
There is a huge gap between demandand supply of low-cost homes. By 2015, the total housing shortages inurban areas is estimated at 891.8 million square metres, more thanthree-fourths of which will in the low-income segment.
Tomeet the market demand and help real estate developers settle theirinventory problem, ministries and sectors have started implementingseveral new policies, particularly supporting development of thelow-cost housing segment.
One of them is the Ministry ofConstruction’s Circular No 02/2013, which allows enterprises to changethe apartment structure of commercial housing projects to make them moreaffordable.
Other policy incentives include a decision toset up a Real Estate Investment Trust (REIT) this July that would,according to Deputy Construction Minister Nguyen Tran Nam, help mobiliseidle money from society and ease the current capital shortage in thereal estate market.
These policies have been welcomed byboth individuals and enterprises because changing the apartmentstructure creates more opportunities for low-income earners to buyapartments, while the trust fund will help developers mobilise muchneeded capital for their projects.
However, the maincatalyst in reviving the local real estate market is likely to be therecent cuts in lending rates, experts say.
Dang Hung Vo,former Deputy Minister of Natural Resources and Environment, said thelower lending rates would have an impact on people who really needhouses to live in as opposed to making speculative investments.
There would be more people who want to take advantage of thisopportunity and withdraw their savings from banks to buy houses, hesaid.
Many commercial banks have already lowered thedeposit interest rates to around 7.5 percent per year, suggesting thatlending rates could drop to 10 percent per year as the central bankexpects.-VNA
They say their assessment is based on rising demand for these kinds ofproperties and the government’s recent changes of policies encouragingdevelopment of these market segments.
The prolongedeconomic slowdown has seen a sharp fall in demand for luxury homes.Also, increasing competition in this segment has seen many developersshift their focus to affordable homes so as to meet market demand anddiversify their risk.
There is a huge gap between demandand supply of low-cost homes. By 2015, the total housing shortages inurban areas is estimated at 891.8 million square metres, more thanthree-fourths of which will in the low-income segment.
Tomeet the market demand and help real estate developers settle theirinventory problem, ministries and sectors have started implementingseveral new policies, particularly supporting development of thelow-cost housing segment.
One of them is the Ministry ofConstruction’s Circular No 02/2013, which allows enterprises to changethe apartment structure of commercial housing projects to make them moreaffordable.
Other policy incentives include a decision toset up a Real Estate Investment Trust (REIT) this July that would,according to Deputy Construction Minister Nguyen Tran Nam, help mobiliseidle money from society and ease the current capital shortage in thereal estate market.
These policies have been welcomed byboth individuals and enterprises because changing the apartmentstructure creates more opportunities for low-income earners to buyapartments, while the trust fund will help developers mobilise muchneeded capital for their projects.
However, the maincatalyst in reviving the local real estate market is likely to be therecent cuts in lending rates, experts say.
Dang Hung Vo,former Deputy Minister of Natural Resources and Environment, said thelower lending rates would have an impact on people who really needhouses to live in as opposed to making speculative investments.
There would be more people who want to take advantage of thisopportunity and withdraw their savings from banks to buy houses, hesaid.
Many commercial banks have already lowered thedeposit interest rates to around 7.5 percent per year, suggesting thatlending rates could drop to 10 percent per year as the central bankexpects.-VNA
