Real estate market likely to recover later this year

Vu Xuan Thien, deputy head of the department under the Ministry of Construction, forecast that in the second half of this year, the market would see a recovery in low and medium-price apartments as well as villas and houses located in suburban regions at reasonable prices.

According to Thien, the second half of the year will be good time for the people to buy property at reasonable prices.

Surges in housing and property prices were less likely, he said.

The existing challenges faced by the property market would remain in the first half of this year, he said, due to the impacts of policies on curbing inflation and stabilising the macro-economy.

Trading activities on the domestic property market have almost stopped, he said, as prices are still extremely volatile. The market has failed to focus on projects that meet the people's demand, especially houses and apartments for rent. Construction of housing or apartment projects is progressing slowly.

Thien said the existing difficulties experienced by the domestic property market are largely a result of a lack of timely guidelines from authorities.

In addition, some property development and trading companies who lack professionalism and adequate financial sources are complicating matters, he said.

Le Thien Linh, head of the General Management Division of LILAMA Joint Stock Company, said difficulties in securing capital have forced his company to focus on manufacturing and construction in stead of property, which has been one of the company's non-core businesses during the past few years.

Meanwhile, few property companies have large enough sources of capital to finance their projects.

Le Thanh Than, director of Lai Chau Private Construction Company, said his firm is an exception.

The company has enough funds for its property projects as it does not rely on banks, said Than, instead using funds from its hotel and tourism businesses to invest in property development.