The objective reason is the increasing demands for accommodation in cities and towns. On average, demands for accommodation in urban areas have increased by 21 million square metre a year.
According to calculations by researchers and economists, office rents in Vietnam is not high compared to the market prices (Vietnam ranks 17th in terms of office rents and 30th in terms of apartment prices in the world) but it is not suitable as far as the economic national development and local people’s incomes are concerned.
A reason that directly affects the too high prices is that investors have shifted from the securities market to the real estate market, considering it as the best way to keep their capital with fewer risks.
The speculation in real estate market is partly due to the low land use taxation, which does not encourage the effective use of land.
But the key reason is due to the rapid increase in terms of demands for apartments and office for lease, making demands exceed supply.
Other reasons relate to policies. People are allowed to buy houses and apartments in urban areas whether they are permanent inhabitants of the cities or not. People that are allowed to buy houses in Vietnam have also been expanded, on a trial basis, to overseas Vietnamese and foreigners.
In addition, investors have met great difficulties in land clearance for investment projects, including housing and new urban areas construction projects.
Within that context, since early April, the real estate market in Hanoi, Ho Chi Minh City and the neighbouring areas have halted suddenly. The number of offers has increased sharply but real transactions have been very low.
According to the Ministry of Construction, the prices of house and land have been reduced by around 20%. This is quite a positive signal as Vietnam has carried comprehensive measures such as the State Bank of Vietnam tightens the monetary policies to curb inflation, loaning interest rates increased to 14-16% a year, some taxes relating to real estate have been adjusted to limit speculation.
These are the first signal showing that the real estate market has been cooled down, stopping “bubble” in the property market, contributing to stabilising the macro economy and curbing inflation.
By VU HUNG - Nhandan.com.vn