Like their colleagues in HCMC, many developers in the capital of Hanoi are fighting for buyers as well. They have launched promotional programs in the wake of an oversupply and a shortage of capital to finance their projects.
Boosting sales to raise funds
In 2009 some property experts projected the Hanoi market would face an oversupply of apartments, though huge demand at the time were causing housing prices to balloon. Property investment then was seen as a safer investment vehicle at a time of stock and gold market volatility.
The projection has come true with the market in Hanoi quieter since early this year. Luxury condo transactions have almost ground to a halt. The villa and office building segments have not been better.
Like the current situation in HCMC, credit tightening policy has been challenging developers in Hanoi. Some of them have found it impossible to access funds and delayed their projects as a result. Meanwhile, others have resorted to incentives to woo buyers due to rising supply, so they have been continuing marketing their products.
Cleve project in Ha Dong District, Hanoi is launching some 5,000 units on the market. Golden Palace project in Me Tri District, also in the capital, has come onto the market with some 1,000 apartments.
Hanoi will see Castle Plaza project on Ho Tung Mau Street supplying the market with 4,000 apartments, and Nam Do Complex project with residential, office building and commercial facilities.
Deputy Construction Minister Nguyen Tran Nam said at a recent news briefing that his ministry was mulling proposing some pro-market measures including extending loans to several property projects.
Nam said the current regulation required developers to finish their project foundations before they raise capital from buyers. But the problem is most developers are cash-strapped, so taking out loans from banks is only a way out for them.
Some projects that were 70% to 80% complete had been put on hold because banks failed to deliver on their financing promises. Developers could not hand over half-done apartments to buyers, nor continue their project development.
Nam suggested loans with a stable interest rate should be resumed to specific projects. For example, projects that have gone through 75% to 80% of the construction process should be given priority to borrow from bank and the same treatment should be extended to small and low-cost projects. Besides, home loans should be offered to potential buyers to stimulate sales on the market.
He, however, noted no loans should go to luxury condo projects or those in the process of site clearance and compensation because they would not help the market.
Now it depends on how the Government acts to give some kind of stimulus to the market in the coming time.
The Saigon Times Daily