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Tony Milton MRICS

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MRICS
APREA (CREIF)

Fast Facts

Date : Sunday, 04 October 2009
Category : Realty - Vietnam General


CHRONOLOGICAL ORDER : Scroll to bottom for latest info


CONTACT US TO OBTAIN A FULL BACK – CATALOGUE


290510-Globally, the risk level in real estate investment is gauged from the proportion of monthly income spent on housing. For many countries in the world, this ratio stands at round 33% for the middle class, which means a household pays 1/3rd of its income for housing. In Viet Nam, however, the fig¬ure stands at 80%. VNN

290510-The Construction Minis¬try has estimated total invest¬ment in a high-rise apartment (20-25 floors) in Ha Noi us¬ing market prices of late 2009, including reasonable profit, at around VND16.7¬-17.5m / US$800-900sqm. However, the price for such apartments in the market is almost double this figure. VNN

310510-Government agencies are seek¬ing ways to control property prices, which are far exceeding their real value, according to a report from Government real estate mar¬ket experts. A group of interdisciplinary experts specialising in real estate recently submit¬ted the report, which focuses on housing de¬velopment and the real estate market in 2009, to Deputy Prime Minister. Expenses needed to build 20-25 ¬storey buildings in Ha Noi are on average VND16.7-17.5m / $874-916sqm while the common price is much higher, standing at between VND28-32m / $1,466-1,675sqm according to the report. Experts blamed the price difference on several reasons, one of which was the habit of "mob" investing, with many people flock¬ing to buy a certain kind of property only because they saw many others do the same. Lack of information has also influenced buyers who were not aware of the real value of property. In addition, the poor management abil¬ity of real estate market management agen-cies has contributed to chaotic market pric¬ing. The report also says that although the country's per-capita housing area in 2009 doubled compared with the figure recorded 10 years ago, there were still 7 million people in urban areas who needed to buy or rent housing. To meet this demand, the country should build an additional 150m sqm of housing, which would require combined capital of VND3tr / $158m to VND4tr / $210 million. In Ha Noi, about 5.5m sqm of housing is needed, in addition to about 11,000 accommoda¬tions for workers in industrial parks. HCM City needs about 5m sqm of housing and more than 50,000 accommodations for workers. The real estate market faces a lack of houses at affordable prices and suitable sizes for a majority of customers. Houses for rent were in great demand in 2009, but they accounted for just 6.3% of the country's total housing fund. VNN

310510-Developers of low-cost housing projects in the country still meet challenges in capital mobilization, site clearance and construction quality. The nation has 33 low-priced condo projects with combined capital of VND2.5tr / $130.9m to accommodate around 55,000 residents ie $2,380 each. SGT

310510-The MoC has asked the HCMC government to pilot construction of condos measuring 20-45sqm for single low-income earners. SGT

310510-A working team for a resettlement program in HCMC has asked the local government to extend the installment payments for buyers of resettlement accommo¬dation from 10 years to 15-20 years. SGT

020610-Local property developers still need capital for around 200 low cost housing projects said the MoC. SGT

020610-Around VND192tr / $10bn of banking capital has run into the property sector, up 4.5% against late last year. The growth rate accounts for nearly 50% of total outstanding loans of the banking industry. SGT

060610-According to HCMC's Depart¬ment of Natural Resources and En¬vironment, no real estate company has paid the new amended land use fee regulations since the supplemental regulations came into force last October. VNN

060610-"Viet Nam has a population of 88m this year with an ur¬ban population of 24m. In 2050, it will have 120m people with urban population of 65m and 150m people in 2100 with urban popu¬lation of 120m people," according to Hyder Consulting. By 2050, HCM City and Ha Noi would have 20m people each, as many as Shanghai and Beijing now. VNN

170610-Due to the lack of funds 144 social housing projects have been put on hold. As of May 31, only 57 out of the 201 applicants for low-interest loans have been successful and only 33 hous¬ing projects with a total investment of VND2.5 trillion (US$132 million) for low-income earners that would have benefited some 55,000 resi¬dents, have got underway. Mean-while, 97 other projects have been. put on hold due to a lack of capital. In terms of housing projects for workers, 24 have begun, worth a to¬tal investment of VND2.6 trillion ($138 million). These will provide accommodation for 125,000 work¬ers. However, a shortage of funds has halted 47 other schemes. The total number of registered housing projects for workers is 264 with a total investment of VND60 trillion ($3.2 billion). A further 263 housing projects for low-income earners with an investment of VND72.7 trillion ($3.9 billion) have also been registered. VNN

200610-With a person earning around $526 per month, even borrowing money from banks for 20 years is very difficult to purchase an apartment ranging from 72¬130sqm in the mid to low-end apart¬ment projects, that range from $900¬$1,300 sqm.VIR

070710-Vietnam has 632 new urban areas covering over 100,000he including 294 projects in the south¬ern region, according to the Ministry of Construction. Most the projects are less than 200he and only 14 ones are designed to cover over 1,000he. SGT

070710-The Central Steering Committee for Housing Policy and Real Estate reported strong recovery of the local realty market recently with stronger capital inflow and many low¬ cost housing projects. The sector hit US$7.6 billion in FDI in 2010 or over 1/3rd of the nation's total FDI capital. SGT

150710-Earlier in 2010 outstand¬ing loans for the property segment reached nearly VND219tr / $11.46bn - a 36% jump compared with the same period in 2009. FDI pouring into the property seg¬ment registered at US$7.6bn - ac¬counting for 1/3rd of total FDI the country attracted. SGTW

170710-According to a recent sur¬vey by the Association of Cities of Viet Nam, 8 out of 9 new urban areas ex¬amined did not have a nearby market, while seven of them didn't have a state school - and none of them had a clinic. The lack of social infra¬structure in big cities like Ha Noi is chronic, but little has been done about. VNN

280710-The Ministry of Planning and Investment said the entertainment sector had grown rapidly, particularly in the south. There were 121 entertainment FDI projects with a combined regis¬tered capital of US$3.5 billion launched in the first 5 months of this year, representing almost half of the country's total FDI. Of the projects launched this year, 67 were in the south and 30 in the north. VNN

300710-Anh Tuan JSC’s low-cost condo project in Ca Mau would cost some VND30bn / $1.57m to develop with 2 blocks of 6 storey buildings with 112 apartments from 36-42sqm each with selling prices lower than VND350m per unit / $18,325 ie $436-509sqm. SGT

060810-A forum titled "Development of the Ha Noi Real Estate Market” estimated the market would need US$130bn in the next 10 years. But the trickle of capital from project owners, civil groups and the Government coupled with limited bank credit for the industry is making the target very elusive. The real estate industry is as much as 70% dependent on bank credit. Owner equity contrib¬utes just 15-20% the remain¬der is mobilised from individuals, non-property companies and the Gov¬ernment." The banks injected about VND218.89 trillion ($11.52 billion) into the property market to June 30, up about 36% against the same 6 months of last year. About 65% of all real es¬tate loans were made in Ha Noi and HCMC. The amount of bank loans for the real estate market will prob¬ably rise slightly as a result of the increase but the amount of credit that goes to real estate will re¬main at about 11% of all loans. VNN

070810-According to a report released by the Viet Nam Report Company, only 38% of customers that purchase real estate in Ha Noi for residential purposes and 62% are investors. The report claimed that 48 per cent of the investors purchase properties to make fast profits, while the remaining 52% are more interested in the real estate's long term potential. The document states that 44% of real estate investors use their own personal funds to finance their purchases and about 35% of investors rely on loans from their friends and relatives. Only 20% of investors admitted to having borrowed money from banks to invest in the industry. VNN

120910-Over 100 low-in¬come housing' projects are planned or under construction, but would-be residents are still waiting on specific guidelines on how to qualify for the Government's public housing programme which aims to provide affordable housing for 60% of col¬lege and university students and a 50% all industrial park workers by 2015. The country currently has about 1.5 million industrial park workers and 33 million students at universities and colleges. The number of stu¬dents in HCMC would reach a million by 2015. Around 60% would need dormitory hous¬ing, creating demand for 75,000 apartments at an occupancy of 8 students per apartment. Some 30 projects for workers have begun, at a total estimated invest¬ment of US$134 million with a total area of 750,000sqm, so these projects are expected to provide accommoda¬tion for nearly 125,000 workers by next year. Another 55,000 low income earners have already been pro¬vided housing in 33 projects with a total area of 655,000sq.m, with prices of $360-515/sqm in Ha Noi. Prices of VND350-500 million ($18-25,770) per 35-65sqm apart¬ment represent a huge burden on people with low incomes, although people will be able to pay through mortgages over 20 years at favourable interest rates. The ministry would is-sue criteria defining eligibity for those with monthly incomes of less than VND5 million ($258). VNN

150910-Arti¬cle 8 in the new Circular 16/2010 allows developers to mobilise capital but capital raised via indi¬viduals or groups cannot be over 20% of the total investment capi¬tal of a residential project. The num¬ber of residential units for these indi¬viduals or groups can occupy only 20% of total housing units in the under construction project. The circular also provides that each individual or household can sign only a capital contribution con¬tract with a developer in a city or province. The head of MoC's Housing Management Department, said: "I believe the cir¬cular' regulations will give the prop¬erty market more transparency and sweep short-term investors and spec¬ulators out of the market." But the chairman of Vietnam House said "It is difficult for the gov¬ernment to prevent short-term investors or speculators joining the market by the circular as the investors can use the personal information of another one to sign into the contribution contract. Vice versa, the circular would prevent capital from flowing into the market, restraining its development." VIR

200910-Property owners would face penalties if they price their properties in U.S. dollar instead of Vietnam dong. However, the current maximum penalty of VND30m / $1,538 is too low. SGT

200910-The MoC said out-standing property loans, as of late July, were around VND210tr / $10.77bn, an increase of some 14% and a decrease of 2% in non-performing loan rates compared to late 2009. Real estate was still an attractive sector for FDI with figures of US$2,360m in the first 8 months of 2010. SGT

240910-Around 194 low income housing projects at a total cost of VND28tr / $1.47bn have been registered for construction so far. Some 170,000 apartments with 7m sqm will be built to house around 700,000 people. VNN

041009-The Deputy Direc¬tor of An Binh Bank said that as the risk (lending) coefficient rate for the property sector is up from 150% to 250% in line with new rules, the bank is considering hiking lending rates. He said buying a house requires a big sum of money and that with a current interest rate, homebuyers who borrow from banks cannot pay the monthly interest. Therefore, those who buy apartments for ac¬commodation will face problems if they do not have a big amount of savings. He added low interest rates will sup¬port home buyers, project develop¬ers and even banks. In contrast, high interest rates will put pressure on borrowers, and once they fail in their payments, banks will face liquidity risks. He suggested inter¬est rates should be 8% to 10% per year to support different sectors including property. According to the central bank, outstanding loans for the property sector had reached VND218tr / $11.18bn by late September, up 18% from late last year. Like other market observers he said abundant supply in the condo market will increase pressure on de¬velopers. SGT

091010-A survey found that nearly 62% of the 500 questioned consumers in Ha Noi had bought real estate simply to resell it at a higher price, and that 44% of buyers had invested their own money in buying property; 35% bor¬rowed from their friends and relatives; and about 20% used bank loans to buy property. VNN

111010-Enterprises must pay VAT and income tax for earnings from transferring rights of capital contribution to property projects. It means that the transfer of the right is considered a transfer of real estate. SGT

111010-The HCMC government has submitted a proposal to the Ministry of Finance suggesting that rental prices be paid depending on purposes of land use. Accordingly, rental fees are suggested to be based on market prices. SGT

161010-It is estimated that the population will increase to 10m in Hanoi and 12m in HCMC by 2030. If the housing standard of 15sqm per capita is applied, the two cities will need some 160m sqm of housing to meet for the demand. SGT

311110-Only 1% of the nation's outstanding loans was reserved for Hai Phong's real estate lending in 2009 while in HCMC and Ha Noi the figures are 47% and 17% respec¬tively. VNN

291110-Most social housing projects had started only when a Government Reso¬lution to promote this type of project was issued in 2009. Although 300 social hous¬ing projects worth VND55tr / $2.75bn were now underway, the number was small against - the more than 2,500 hous¬ing projects; new urban projects and other real-es¬tate projects across the coun¬try. These occupied a total of about 100,000ha. Almost 500 FDI funded real estate projects with registered capital of more than US$40bn were re¬ported as of the end of 2009. FDI in real estate totalled $2.5b or 21.8% of all newly registered FDI in 2009. The average size of a real estate project is almost $145m. The national housing stock has increased by 700m sq, including 225m sqm in urban Viet Nam during the past 10 years. The amount of urban housing has averaged a yearly increase of 15%. Housing and new urban precincts deliver about 1.2m sqm and more than 3.5m sqm in HCM City. Viet Nam's housing provided 16.7sq m per head of population – 19.2sqm in cties and 15.7sqm in the countryside last year. VNN

291110-Vietnam as of the end of October had US$12.8bn in FDI capital of which the real estate sector attracted US$2.8bn. This included US$2.7 billion in fresh capital and US$132 million for operating projects. SGT

291110-The MPI predicted that by the end of 2010, Viet Kieu real estate investments would make up around 70% of the total remittances. VIR

031210-Land management. corruption is still alive despite great efforts to kill it. According to a survey recently con¬ducted by the Sweden and Danish embassies and the World Bank, land management and use corruption in Viet¬nam was worsening, as 85% of the surveyed households said there was corruption in this field and 30% of the targeted businesses said they had to give bribes to get land use certificates. VIR

121210-A population and housing survey conducted in 2009 shows that 86.3% of houses in Viet Nam were either makeshift or not built for long-term use. VNN

151210-Surveys show that it takes 127 days on average, or even 1,290 days in some cases, to process a land-related ap¬plication on the ward and commune levels. A member of the public has to spend VND4-85m / $205,$4,359 to get such an application approved quickly. More than 30% of the applicants said they had to bribe district-level offi¬cials in charge of one-stop administrative matters. Fur¬thermore, over 50% and 44% must turn to an intermedi¬ary for help regarding land ¬use right renewal and land transfer, spending VND9m / $462 and VND2m / $103 per case respectively. Ac¬cess to information, which should be widely available, A study jointly undertak¬en by the Embassy of Swe¬den, the Embassy of Den¬mark, the World Bank and Transparency International indicates that 85% of the sur¬veyed households are aware of corruption in land-use management and 30% of en¬terprises must resort to brib¬ery to obtain the certificates they want. The World Bank points out loopholes in Vietnam's anti-graft strategy. These shortcomings include the conflicting roles of people's committees, which make decisions on land use and combat corruption at the same time. Even pro¬vincial inspectors are also under local people's com¬mittees. Stamp¬ing out administrative mo¬nopoly is essential. Land evaluation and zoning, as well as project appraisal, must be undertaken by in-dependent organizations. SGTW

261210-Viet Nam needs more than VND2.2tr (US$110 billion) in the next 5 years to develop housing, ac¬cording to a report recently released by Ministry of Construction. Ministry experts came up with the figure by assigning 21.5sqm of floor space per capita. The report analysed data from last year's general demographic census which projected that the country's to¬tal population would be more than 90m in the next 5 years. This increased population would need about 2m sqm of housing in the next 5 years. Although Viet Nam ranks 8th out of the 10 ASEAN countries in terms of the percentage of the population liv¬ing in urban areas, its urban popula¬tion has experienced an average an¬nual growth rate of 3.4%. Currently, around 14% of city¬ dwellers rent while the rate for the population as a whole is 6.5%. The report pointed out that make¬shift housing is on the rise in cities across the country and attributed this to an increasing number of migrants from the countryside needed simple housing. Housing for the low income sector was a now a pressing issue and needed more Government's attention. SGT

271210-Outstanding loans for real estate investment are expected to reach around VND228tr / $11.7bn at the end of 2010, up 23.5% against 2009. SGT

110111-Recent Ministry of Construction statistics show that only 15% of real estate transactions take place on transaction. The market is plagued by poor transparency. According to the Department of Housing Administration and Real Estate under the Ministry of Con¬struction, the country has a total of 600 real estate transaction floors. Despite this, the number of transactions remains very low. Total real estate sales nation¬wide through these floors totalled 3,679 in Ha Noi and 3,352 in HCM City. Many investors have sought to avoid trading through trans¬action floors by exploiting le¬gal loop holes. As a result the number of deals made through the transaction floors remains low. Director of Housing Administra¬tion and Real Estate said the department re¬quested the floors to report their performance from the beginning of 2010. Only 20% have so far complied. The lack of a common standard had led to a dispar¬ity in the market and that people had little faith in real estate trans¬action floors. VNN

120111-Real estate prices, especially in Ha Noi and HCM City, have increased almost on a daily basis. The prices of homes and apart¬ments in Vietnam were out of con¬trol and had skyrocketed beyond the reach of most buyers, said Viet Nam Construction Materials Asso-ciation chairman. VNN

150111-Vinaconex Xuan Mai has launched sales of 100 low-cost condos in Vinh Phuc Province for VND7m / $359sqm. SGT

200111-The ministry of Construction announced 500,000 houses or 24msqm of housing for workers would be built in IPs & EPZs nationwide by 2015, to meet about 70% of their housing needs. Of the VND144tr / US$7.5bn total cost, VND7.2tr / $370m will come from the State budget. VNN

200111-Real estate accounted for 36.8% of the total registered capital in 2010 with 27 new projects worth USD$6.7bn and 6 projects with additional USD$132m. SGTW

050211-Reform of administrative proce¬dures, increased transparency and enhanced accountability are all key factors in the fight against land cor¬ruption in Vietnam, according to a report commissioned by the Embassy of Denmark, Sweden and the World Bank, the report, "Recognising and reducing corruption risks in land management in Vietnam", evaluated the leading causes of corruption in this country. Land corruption land in Vietnam was mostly about two key, issues: obtaining a land-use rights certificate by individuals and organisations and the process associ¬ated with land acquisition and allocation. The report has found that local authorities have the "absolute right" to decide which individuals or organisations could be granted land. And this is the key for corruption. It pointed out that land man¬agement and use corruption in Viet¬nam was worsening, as 85% of the surveyed households said there was corruption in this sector and 30% of the targeted businesses said they had to give bribes to get land-use certificates. VIR

150211-The Ministry of Construction has announced the national housing development strategy under which the average housing space will be 21.5sqm per capita in 2015. The housing area in the country expanded by 71m sqm during the 1999-2000 period. SGT

140211-Property brokers in the country expect a downturn in the number of new condo projects completed this year with under 10,000 flats. Over 70,000 condos are expected to complete in Vietnam after 2013. SGT

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