Property rescue package set to unlock the market

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Vietnam Cement Association chairman Nguyen Van Thien said the dormant property market hurt the operation of not only property businesses, but cement companies also, that were all looking for help.

Ha Tien Cement director Tran Viet Thang argued that since property involved different sectors like cement and steel, its falling into recession created a chain effect on the development of associated industries.

According to Vietnam Real Estate Association figures, approximately 150,000 apartments got stuck in two big cities Hanoi and Ho Chi Minh City by the end of the first quarter 2013, these apartments were mainly in ‘papers’ or partly-done.

If these projects were underway, the demand for cement and other building materials would take off, so the current huge stockpile of building materials could be eaten into.

Dat Lanh Land deputy director Nguyen Van Duc said the property market’s long hibernation had huge consequences, such as high inventories at different sectors as cement, steel and wood products.

“To clear inventories, the government should allow firms to divide apartments into smaller units from 30-40sqm and with price in the range of VND500-600 million ($24,000-$28,000) per unit to boost sales,” Duc suggested.

OceanBank board member Nguyen Tri Hieu said: “The recent VND30 trillion ($1.4 billion) credit package with preferential interest rates to home buyers and property businesses is important to revitalise the market and associated sectors since [property market] doldrums had brought severe consequences to diverse sectors, not property projects alone.”

Hieu, however, suggested the loan interest rate should be kept lower than 5 per cent per year and remain stable in five years, whereas payment period be extended to at least 15-20 years.