HANOI -
Vietnam will hold promotional events, calling for
foreign investment, in Singapore and Malaysia next
month in a bid revive the country's crippled
real-estate market, according to the Urban
Investment and Development Joint-stock (IDJ)
company.
At these events, about 100
residential, office, hotel, tourism and industrial
development projects in Hanoi, Hai Phong, Da Nang,
Nha Trang and Ho Chi Minh City will be promoted,
said Tran Duc Thanh, director of the IDJ, which is
organizing these campaigns.
Foreign
capital would help to heat up the market, that had
stagnated in the past year from speculation and
lack of transparency, he said. Vague rumors,
before and after Decree 181 came into effect on
November 16, 2004, banning the sale of small
land
plots without concrete structures, increased the
concerns of landowners. And speculators pushed up
real estate prices and created fake land "fevers,"
compounding the problems of the sector.
Overdue bank loans have become a nightmare
for real estate investors, with some reportedly on
the verge of bankruptcy. Consequently, bankers are
cautious with real estate loans for both buyers
and real estate companies due to high risks, he
said. "Though supply is not higher than
demand, people who really need houses cannot
afford to purchase them," said Ngo Tri Long,
deputy head of the Pricing Institute.
Real
estate prices have been inflated, with the margin
from buying to selling remaining huge in 80% of
successful transactions. According to IDJ's Thanh,
Vietnam's real estate market had huge potential
and Singaporean and Malaysian investors had
credible records of investing in such projects.
"These events will provide a chance to
Vietnamese real estate developers to directly
interact with 400 Malaysian and Singaporean
investors," Thanh said. "The success of these
business talks could create an impetus for the
domestic property market," Thanh said, adding that
foreign investors realized the potential of the
domestic market.
"They [investors] believe
in investing when the market is down. But it is
also the time when Vietnamese developers need
capital the most." Stimulating demand in the
market, temporary cutbacks on housing supply, and
more flexible policies on capital for real estate
companies were the remedies suggested by the
Ministry of Natural Resources and Environment to
rejuvenate the sector.
Experts, though,
prefer long-term measures by creating an
environment for fair competition and transparency.
Though it appears to be in a crisis, the market
still had potential, and continues to be
attractive for investors, experts said.
According to Peter Dinning, real estate
manager of VinaCapital, the market freeze was
temporary, and fast economic development and
urbanization were enough reasons for investing in
the market.
VinaCapital plans to invest
US$50 million in the country's real estate market.
Thanh said that besides foreign capital, foreign
investors would bring in expertise for developing
property projects, which were lacking in
Vietnamese developers.
