Former Deputy Minister of Construction Nguyen Tran Nam said: “Real estate firms are on the defensive. It is not the right time to attack.”
He cited a report as saying that the number of licenses granted to construction works has decreased by 16 percent, while 150 licensed projects have been suspended for examination.
The number of apartments, villas and houses launched into the market in Hanoi and HCMC has decreased by 30 percent compared with Q4-2018 as a result.
He believed concerns about ‘real estate bubbles’ exist, prompting the government to take action to restrict the credit flow into the real estate market are the reasons why the real estate market has cooled down after hot development in 2014-2018 period.
The capital flow would be restricted even more in the time ahead, the expert warned.
Circular No 36 issued by State Bank of Vietnam’s (SBV) stipulates that the proportion of short-term capital which can be used for long-term lending must be cut from 60 percent to 40 percent within two years.
The credit growth rate for the real estate sector slowed to 8.56 percent in 2018 from 12.86 percent in 2016, local media reported.
Apart from tightening control over real estate lending, the government has also requested to check land development programming and inspect some huge projects. As a result, the supply is reducing in the context of increasingly high demand.
“Realtors now must be sure that they can strictly follow all procedures and requirements set by appropriate agencies. If they don’t, they will see their projects suspended,”
In addition, there are two bad investment trends in the real estate market, Mr Nam added.
Firstly, investors have flocked to Mui Ne, Van Don and Phu Quoc to buy land, causing a ‘land fever’ in the localities.
Secondly, investors are now rushing to pour money into resort real estate projects, mostly in sea cities/provinces of Hai Phong and Hung Yen. Land prices there are still cheap and the required procedures are not too complicated.
