The HCM City Real Estate Association (HOREA) says there has been a sharp increase in inventory and has urged loosening of legal procedures to hasten completion of projects.
HOREA’s chair Le Hoang Chau on March 30 told Dat Viet that the inventory value had reached hundreds of trillion of dong.
He said 24 real estate firms reported they had the inventory value of over VND1 trillion for each, while four large groups have VND4.2-7.397 trillion worth of inventory.
According to KB Vietnam Securities, the two firms with highest inventory are Vingroup (VIC) and Novaland (NVL). They account for 63 percent of total inventory.
The other names include Phat Dat Real Estate Development JSC (PDR – VND7.397 trillion, Khang Dien House Trading and Investment JSC (KDH – VND7.022 trillion), Dat Xanh Group (DXG – VND6.791 trillion) and Nam Long Investment (NLG – VND4.205 trillion).
|Unfinished products are the biggest worry for real estate developers. They have the right to sell these products, but are facing problems in legal procedures. As a result, the developers cannot continue construction.|
Chau did not give detailed figures, but pointed out that the inventory, half-finished (products in the future) and finished products, are mostly luxury apartments, condotels and officetels.
These are the types of properties that are having legal problems.
The slow sale of real estate products is also attributed to Covid-19 which has been hitting all business fields.
Unfinished products are the biggest worry for real estate developers. They have the right to sell these products, but are facing problems in legal procedures. As a result, the developers cannot continue construction.
“If the problems cannot be solved, real estate firms won’t be able to sell the products. They have to pay bank loan interest rates and construction costs, while they cannot sell products to get back the investment capital,” Chau said.
HOREA has asked the government to apply necessary procedures to help real estate developers, including clarification of legal procedures and preferential interest rates.
Nguyen Van Dinh, deputy chair of the Vietnam Real Estate Brokerage Association, said the settlement of legal problems and administrative procedures won’t address the main issue.
Dinh said it is necessary to apply policies to help investors implement projects on affordable apartments and commercial housing, because the projects meet housing demand.
Meanwhile, condotels and officetels need specific policies which address the problems that these types of property are facing.
“It’s necessary to reconsider the method of calculating inventory used by HOREA,” he said.
According to Dinh, the apartments to be finished in the future, which investors have the right to sell, must be products that have completed legal formalities. In other words, these projects don’t have legal problems but face issues related to investors’ capability and market demand.
The domestic real estate market in the first quarter had the lowest transaction volume in the past four years due to the impact of the COVID-19 pandemic, Viet Nam Association of Real Estate Brokers (VARS) said.
The novel coronavirus SARS-CoV-2-caused acute respiratory disease (COVID -19) pandemic has cost many real estate firms trillions of VND from their market capitalisation value.