Property loses golden lustre duet

The recent gold fever has left property buyers cold

Gold prices on the domestic market increased by more than VND1 million ($50) per tael to the record VND38.2 million-VND38.5 million ($1,910-$1,925) in the early November after the world market set a record of $1,410 per ounce. The prices have been recently fluctuated around VND36 million ($1,800). Gold prices in the early 2010 stood between VND28-29 million ($1,400-$1,450) per tael.

Also, the US dollar-local currency exchange rate has set a new peak at around VND21,100-VND21,200 a dollar in the black market, from VND19,500 seen in early 2010. The State Bank recently nailed the official rate to VND19,500.

According to the Ministry of Planning and Investment’s General Statistics Office, gold prices and foreign exchange rates have continued fluctuating wildly. However,  real estate prices have kept stable.

Nguyen Thi Thanh Huong, director of Tin Nghia Real Estate Trading Floor, said: “Most of the projected properties we have sold recently have their own prices separate from gold and US dollar pricing levels.”

Vietnamese people’s habit of valueing properties by gold was just seen in  private properties, while most other transactions had been done in dong or US dollars with fixed exchange rates, Huong said.

She said: “Properties compared to gold and US dollars will be more competitive in terms of savings and investment purposes because of developer’s recent reasonable pricing scheme to stimulate the property market.”

Tran The Anh, marketing manager of Daewon Thu Duc’s Cantavil Premier An Phu project in the southern hub’s District 2, said: “We are now working on pricing for the project with no references to the prices of gold and US dollars. The project will be launched for sale early next year.”

Decree 71, which provided restrictions to property transferral deals, had made real estate developers like Daewon Thu Duc carefully consider pricing strategies to make products affordable to buyers, said Anh.

“This means that property is getting cheaper and will be more competitive when gold and US dollars are unstably priced in the coming time.”

Anh said prices for a square metre at the Cantavil Premier An Phu project were originally set among $1,800-$2,300 but they could be adjusted to $1,500 each.

The State Bank in early September directed its branches in Hanoi and Ho Chi Minh City to tightly monitor US dollar-listed prices for property trading and construction projects.

The Article 22 of the Foreign Exchange Management Law bans trading, paying, listing prices or advertising with foreign currencies, except among credit institutions.

Accordingly, enterprises and individuals are not allowed to list and collect prices or services fees in foreign currencies without approval. Each violation carries a VND20-30 million ($1,000-$1,500) fine and the money made from the violation is confiscated. Offenders’ business licences may also be revoked.