Experts speculate that the real estate market’s big freeze may beshowing signs of thawing, with many confident that some segments willsee an upsurge activity in 2014, says Vietnam Investment Review.
According to Jonathan Tizzard of Cushman & Wakefield Vietnam, arange of positive signs have been observed in the past few months,encouraging the real estate market.
"The bad debt inthe banking system is a major issue that has stifled the economy inrecent times. The problems have not been worked through, but they arebeing addressed, whether it is through the Vietnam Asset ManagementCompany or the banks identifying their problems and working out theirbad loans themselves," said Tizzard.
The slowrecycling of real estate, Tizzard added, was the collateral of this baddebt, and should not be seen as a negative sign. On the contrary, it wasdescribed as being part of the normal market cycle as real estate isre-priced at a level that is more attractive to the market.
"When inefficient real estate developers are allowed to ‘sit’ on theirunproductive assets, this causes stagnation in the market as has beenthe case in Vietnam for some time. We expect to see more distressedproperty being offered to the market in 2014," he predicted.
Cushman & Wakefield’s experts believe that Vietnam’s monetaryenvironment has been stabilised, particularly as the importance of goldas a currency has diminished and faith in the dong restored.
In addition, inflation has very much been kept at a sustainable leveland interest rates are coming down. While this has many effects upon thereal estate market, the most important over-arching point has been thatconfidence has slowly been restored to the marketplace.
Vietnamese traditionally invest in gold or real estate, and after manylocal investors lost out in the gold bubble in 2013, anecdotal evidencesuggests that the perception of gold as a safe investment has beenskewed, with real estate set to benefit.
Apart fromthe recovery in domestic demand, Cushman & Wakefield expects anincrease in foreign demand for Vietnamese real estate.
"It is being proposed in the National Assembly that there will be moreequal treatment between foreign and domestic entities in Vietnam,"Tizzard said.
In agreement with Cushman &Wakefield is last week’s report from Viet Capital Securities. VietCapital Securities believe that the price of real estate in Vietnam hasreached its bottom line, particularly in Ho Chi Minh City.
"We predict that there is little possibility of further reduction inprices in the coming time, because if the prices go any lower,developers will be selling their products below the input costs," thecompany said.
Any further pressure to reduce priceswould have to come from developers lacking liquidity, which wouldpresent a good investment for other investors looking to speculate onthe market.-VNA
According to Jonathan Tizzard of Cushman & Wakefield Vietnam, arange of positive signs have been observed in the past few months,encouraging the real estate market.
"The bad debt inthe banking system is a major issue that has stifled the economy inrecent times. The problems have not been worked through, but they arebeing addressed, whether it is through the Vietnam Asset ManagementCompany or the banks identifying their problems and working out theirbad loans themselves," said Tizzard.
The slowrecycling of real estate, Tizzard added, was the collateral of this baddebt, and should not be seen as a negative sign. On the contrary, it wasdescribed as being part of the normal market cycle as real estate isre-priced at a level that is more attractive to the market.
"When inefficient real estate developers are allowed to ‘sit’ on theirunproductive assets, this causes stagnation in the market as has beenthe case in Vietnam for some time. We expect to see more distressedproperty being offered to the market in 2014," he predicted.
Cushman & Wakefield’s experts believe that Vietnam’s monetaryenvironment has been stabilised, particularly as the importance of goldas a currency has diminished and faith in the dong restored.
In addition, inflation has very much been kept at a sustainable leveland interest rates are coming down. While this has many effects upon thereal estate market, the most important over-arching point has been thatconfidence has slowly been restored to the marketplace.
Vietnamese traditionally invest in gold or real estate, and after manylocal investors lost out in the gold bubble in 2013, anecdotal evidencesuggests that the perception of gold as a safe investment has beenskewed, with real estate set to benefit.
Apart fromthe recovery in domestic demand, Cushman & Wakefield expects anincrease in foreign demand for Vietnamese real estate.
"It is being proposed in the National Assembly that there will be moreequal treatment between foreign and domestic entities in Vietnam,"Tizzard said.
In agreement with Cushman &Wakefield is last week’s report from Viet Capital Securities. VietCapital Securities believe that the price of real estate in Vietnam hasreached its bottom line, particularly in Ho Chi Minh City.
"We predict that there is little possibility of further reduction inprices in the coming time, because if the prices go any lower,developers will be selling their products below the input costs," thecompany said.
Any further pressure to reduce priceswould have to come from developers lacking liquidity, which wouldpresent a good investment for other investors looking to speculate onthe market.-VNA
