Positive spin on second half sales

Experts are predicting a better second half to the year Photo: Le Toan

Vu Van Phan, deputy head of the Ministry of Construction’s Housing and Real Estate Market Management Department said the market had seen positive moves in the first half of the year, especially among cheaper and medium-value residential developments. Phan believed that this upswing would continue into the new year.

Former vice chairman of the National Financial Supervisory Commission Le Xuan Nghia believed the recovery in the second half of this year would greatly depend on the economy’s overall growth. A real estate boom would go hand-in-hand with a more optimistic view of the macro-economy’s development.

However Nghia stressed that apart from economic growth and dealing with bad debts, the real estate market still needed more transparent policies and financial mechanisms.

“If this is the case we can hope to see a medium-paced recovery in the second half of the year,” he predicted.

Meanwhile CBRE Vietnam’s managing director Marc Townsend commented that the real estate market was likely to have a good second half, particularly in the lower-priced segments, but he cautioned about a major boom in the sector.

“Developers will begin dusting-off their old residential and township developments and we’ll see construction resume. As prices have fallen, it could well be the case that buyers may choose to move up to a higher quality bracket,” Townsend suggested.

Townsend expected that the mid to high-end segments would see more interest while the high-end segment will see speculators return. Overpriced prime-location projects may still remain frozen or converted to other use.

However Nguyen Van Duc, deputy director of the Dat Lanh Real Estate Company struck a note of caution. He said that despite a warmer first half, the second half could still face difficulties. ”I still see a tough business environment, especially for projects that haven’t received any financial support from the government,” he said.

The Ministry of Construction reported that in the first half of the year, there was a strong increase in transactions for small and medium-scale houses at reasonable prices. Some developers that had halted construction restarted their housing projects.

The ministry said the supply of apartments in large cities like Hanoi and Ho Chi Minh City had increased and transactions for relatively cheaply-priced apartments had surged. The report said that in the first half of this year, Hanoi saw 4,000 successful transactions, double the same period last year. Ho Chi Minh City echoed this with apartments priced at VND15 million ($714) per square metre selling well.