VietNamNet Bridge - The number of newly set up real estate firms has been on the rise, while commercial banks are pouring more money into real estate projects.

A report from the Vietnam Real Estate Association shows that the number of real estate firms established in the first quarter of 2015 was 50 percent higher than the same period last year.

The business registration management agency has confirmed that the number of newly established real estate firms is on the rise. 

It said 19,049 businesses in different fields were registered in the first quarter of 2015 with total registered capital of VND111.218 trillion.

While the number of new businesses increased slightly by 3.8 percent compared with the same period last year, the number of new real estate firms increased sharply by 50 percent.

The establishment of real estate firms, to some extent, shows the warming up of the real estate market after a long period of hibernation, analysts said.

This is good news not only for the real estate sector, but also for the national economy. The long-lasting stagnant market caused problems for the government, which had to launch several stimulus packages to help revive the market.

An analyst said that investors were rushing to set up new businesses because they are encouraged by the predictions that the real estate market would heat up this year.

A local newspaper quoted Dr. Le Xuan Nghia, a member of the National Monetary Advisory Council, as saying that real estate remains the investment channel in 2015 and upcoming years, because in general, the real estate prices in Vietnam are not that high compared with other regional countries.

Meanwhile, Dr. Nguyen Tri Hieu, a banking expert, noted that commercial banks have stepped up disbursement for the real estate sector to offset slow credit growth in the production sector.

One bank offers an attractive credit package with zero percent interest rate for the first six months and 5 percent for the first year. 

Nghia has revealed that he and his associates are working on a plan to suggest to the government solutions to the real estate market, saying that another bailout worth VND50 trillion to help warm up the property market may be launched in the time to come, once the disbursement of the VND30 trillion stimulus package ends on June 1, 2015.

Though supply is expected to increase significantly, analysts do not think prices will fall. This could create a “bubble” in the real estate market once again, Nghia said.

US$1 = VND21,000

Kim Chi