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Viet Nam Real Estate Newsletter A65 Page 2
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MARKET SITUATIONIce still not thaw on the realestate market
Vneconomy – 05 Jan, 2009 The decreasing real estate prices, an inconsiderable number of transactions and the period for payingthe capital and interests have created the most difficult situation for investors. The previous loancontracts have also mortgaged the properties. When the investors have no money to pay the debts, thebanks will put on sale of the collateral. As a result, the real estate supply on the market increases andthe decreases in the real estate prices are more likely to happen.The real estate market will be caught in avicious circle and the market is less likely to heat up within thenext year. The main cause is that the market lacks the capital for further developments. Therefore, thesolution that attracts most interest and can save the market is the capital. The solutions to rescuing themarket such as transferring the projects, cooperating with the foreign investors or using the State-ownedcapital are very hard to implement due to the decline of the global economy.To intensify the market, the essential solution isencouraging the development of the investment trustsand the joint stock companies to mobilize the investment of the public and the domestic and foreigninvestments for the market. The investment institutions will play the intermediary role between theunprofessional investors (public, kinds of insurance funds, etc) and the professional investors on the realestate market.
Pressures for price decreases
Nhip Cau Dau Tu – 05 Jan, 2009
2008 was a successful year for the owners of grade A office buildings for rent in Hanoi and Ho Chi MinhCity when the rents and occupancy rate has continued to be the highest until now. The early 2007, therent of grade A buildings was 35 USD/ m2/ month in Ho Chi Minh City. One year later, the rent exceeded60 USD/ m2/ month. Until the second quarter of 2008, a new threshold was set to be 75 USD/ m2/month. And at the approach of New Year’s End, the record price was set when there was a leaseaccepting the rent of nearly 100 USD/ m2/ month (calculated following the real rental area). AlthoughHanoi did not have the great leaps like HCMC, the average rent of the grade-A office buildings also wentup accordingly. The average rent exceeded 50 USD/ m2/ month and the highest rent was 68 USD/ m2/month.The fact that the prices of grade A buildings dramatically increased while the new supplies have not yetappeared has pushed the rent of grade B and C buildings higher. However, in Ho Chi Minh City, thegrade-B office market has started to reverse its direction when the economic difficulties clearly appearedin March 2008. The rent also leveled off and tended to decrease. The main reason was that the newsupply rapidly increased in the year while the demand started to saturate and the difficulties in thebusiness also forced the companies to review the rent of offices. According to consultants, in 2009, themarket of offices for rent will reverse its direction as compared to the year 2008. The total office spacefor lease will increase by about 60.000 m2, which will make the investors obliged to reduce the prices toattract and hold the tenants in 2009.However, the majority of the small and medium companies, especially the domestic ones, have tendedto choose cheap offices. Especially houses, apartments or other types of real estate were convertedfrom the other purposes into the offices with the rents of below 15 USD/ m2/month. Regarding thecompanies that cannot afford the rent in the CBDs, the buildings in the environs can be a reasonablesolution with the prices of 20 - 30 USD/ m2/ month.
35 million invested in buildingwelfare houses
VietRees – 06 Jan, 2009
The project of investment in building welfare houses in the period of 2009 - 2010 which is one of thesolutions to kicking the demand and dealing with the economic decline has been completed.Accordingly, the total capital of this solution is 35,000 billion.In which, it includes an investment of 15,000 billion in the welfare houses, the capital for kicking thehousing demand of the people with the medium and low incomes and 20,000 billion VND for socializedhousing program.The project is targeted at the people with the medium & low income and housing demand, including theworkers in the industrial zone, export processing zone; the staff, civil servants and officers that areworking at the enterprises; contributing to increasing the house supply and stabilizing the propertymarket and meeting the social security. Financial supports aim at attracting the economic sectors toinvesting in building the houses for the people with medium and low income.
REAL ESTATE FOREIGN INVETSMENTHCMC leads the top 10 localitiesin attracting FDI in 3 years
Sai Gon Giai Phong – 07 Jan, 2009According to the Ministry of Planning and Investment, within 3 years (from 2006 -2008), there are 63localities attracting the FDI, in which Ho Chi Minh City has leaded the list of 10 localities attracting mostFDI, with 13.7% of the total registered capital. Ba Ria-Vung Tau has come second with 13.2%, the nextinclude Ninh Thuan and Ha Tinh, Ha Noi, Thanh Hoa, Phu Yen, Dong Nai, Binh Duong and Kien Giang.The recent foreign investments have dramatically moved to the central coastal provinces and TheMekong Delta.
Total FDI in Vietnam in 2008
Source:
General Statistics OfficeThe FDI in 2008 has continued to reach a highresult. The average registered capital in thisyear has reached 51.5 million USD, increasedby 39 million USD as compared to the year 2007. From the beginning of the year to 19thDecember, 2008, the whole has had 1,171projects licensed with the total registered capitalof 60.3 billion USD which is 3.2 times bigger than 2007.
FDI record in 2008
Until the end of 2008, theimplementation capital hasreached 11.5 billion USD, whichis the highest figure within 21years.The registered capital in 2008has exceeded 60 billion USD,which has also been a recordfigure until the current time.
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