Director of the HCMC Department of Construction Tran Trong Tuan, speaking at a meeting last Friday on the city’s socio-economic performance, said it is too soon to conclude the housing market is cooling.
The property market, which has turned red hot in the last three years thanks to the loosening of home credit, should be thoroughly reviewed, Tuan told the meeting. There were only 7,000 condo units sold in 2013, only 28.9% of the total offered, but condo sales shot up to 16,950 units (51.8%) in 2014 and 36,160 (56.8%) in 2015.
Growth momentum has continued this year. But there is speculation that the market is cooling, something which requires a careful review.
“In the first six months, the number of condos sold accounted for 31.7% of the total on offer (14,970/47,252 units). This is the first-half figure, which cannot be used to justify the claim that there is some cooling in the market; otherwise, the market would be negatively affected,” Tuan said.
He said with confidence that condo sales will improve from now until the end of the year. This year his department has issued 52 permits for property developers to raise capital from the public to fund their projects. Around 57,000 homes will be launched onto the market next year, with 9% of them in the medium-end segment.
Though acknowledging a discrepancy between supply and demand, Tuan said the city’s support for low-cost housing projects would pay off as housing products on the market could be diversified to meet different needs of different groups of homebuyers.
“With 39 low-cost housing projects underway, the Department of Construction will seek to accelerate their development and put the project approval process on fast track to boost the supply of affordable homes. From now to 2020, 30,000 budget homes will be made available on the market,” Tuan noted.
At the meeting, HCMC Vice Chairman Le Van Khoa said the city has put under control what might lead to a property market bubble and that next year the market may remain stable.
Khoa, however, told the construction department to closely monitor supply and demand, and take tax and other policy measures to prevent the market from volatility.
“The Department of Construction should join forces with the State Bank of Vietnam to make sure the relationship between property firms and lender banks is healthy.”