Housing prices far above average incomes

Housing prices in Viet Nam are still too high in comparison with people's average income. VNS Photo Nguyen Manh Ha

Quang said this during a discussion on how to buy an apartment for less than VND2 billion (US$93,400) held in Ha Noi yesterday, adding that such a situation had arisen because housing prices had always increased more than people's incomes.

In addition, the application of technology and science in reducing housing construction costs was limited.

Property developers should enhance the application of science and technology, as well as improve effectiveness in management to save production costs at a maximum level, thus reducing selling prices.

"The Government should have a transparent mechanism, which together with transparency from real-estate firms would reduce housing prices to their real value," he said.

Responding to a question on real-estate investors and transaction floors having come together to push housing prices higher, Quang said the increase was being considered normal after a long period of quiet development.

The property market has seen strong recovery as the number of successful transactions during the first two months of the year was thrice as much as the same period last year.

The number of newly-established property companies during the period surged by 89 per cent to 13,766. The property sector was also ranked second in attracting foreign direct investment into Viet Nam during January and February this year.

"However, the sky-high property prices are far from reality. Also, home buyers should be careful while choosing investors, and choose those who are transparent in the market," he added.

Sharing these ideas, Pham Duc Toan, the general director of EZ Viet Nam Property Investment and Development Company, said the market decided selling prices. Investors and transaction floors could not create a "fever."

Toan said most home buyers at this time were reflecting real demand and housing supply would increase.

He also expected around 13,000 new apartments to be launched in the second quarter of the year.

"The market segment with selling price of less than $93,400 each accounted for a half of the total. Most current property developers are targeting the market segment."

Huong Tran Kieu Dung, the deputy general director of the FLC Group, said the property market should pursue sustainable development instead of a bubble development.

"As a property developer, we always target providing housing products, based on the market's real demand. This was also the reason that our prices would be attractive, compared to similar products in the market," Dung said.

She added that the market had become warmer and was showing signs of an increase, as well as preparing for a new sustainable development period.

"It is time for the Government to enhance management to avoid the development of a property bubble."

Nguyen Quoc Hung, the deputy director of the Bank for Investment and Development of Viet Nam's (BIDV's) Tay Ho Branch said a number of home buyers were seeking loans from their bank.