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Vietnam housing market-another one bites the dust |
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HOME >> NEWS >> Vietnam housing market-another one bites the dust |
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 According to Vietnamese news sources, Vietnam’s residential property market is experiencing heavy losses at the moment. Gone are the days of investor surges racing to invest their dollars, in a hope for a tidy profit.
Due to the current global property gloom, many domestic Vietnamese property markets are now facing falling property values. By far the biggest losses in investments have been seen at the high end market with drops of up to 50%.
Falling prices have been largely blamed on the burst global bubble and the reluctance to issue loans to investors and developers by banks. Those who once thought of reaping fat profit margins might just have to accept the fact that they are lucky to get away without any losses out of pocket at all. The outlook certainly isn’t rosy.
In HCM City an apartment at the New Saigon Building was listed at VND32 million (US$2,000) per sq.m early this year. The current asking price for the same flat has since fallen to a range from VND17 million to VND19 million ($1,062-1,187).
As it seems many, if not most, Realtors of high-end apartments are starting a new trend of cutting their prices to keep the market afloat.
Brett Ashton, managing director of Savills Viet Nam Ltd. stated that
“Vietnam has just learned that its real estate market is no different from others around the world. What goes up, indeed does come down”.
This certainly does level the playing field for most of us, but at what price?
While we all realize that property has its ups and downs, nobody expects to be at the receiving end of a major investment loss and with figures that range in the hundreds of thousands and millions, this is not for the faint hearted.
This whole global economy will be hell for many property owners, especially those who have over committed themselves financially.
While any healthy real estate market relies on debt financing to keep it going, the market in Vietnam has completely dried up in that regard. This is partially due to red tape and on the other hand the lack of available (and affordable land) to overseas investors with the cash flow.
Ashton predicts another price drop of 10-20 percent in some areas in the country over the next few months.
This certainly does raise some concerns as not too long ago the Vietnamese market was still hailed strong. A sudden drop in markets can have a massive chain effect into the economy reaching far further than it seems in the first instance.
For the moment we can sit tight and watch what will happen in the future.
Source: http://www.overseaspropertymall.com/ |
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