Posted on 16 Feb 2009
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According to many property brokers in the city, the number of property-related transactions increased sharply after Tet (the Lunar New Year festival).
Lam Van Chuc, director of the Phuc Duc Real Estate Company in District 2, said the number of people that bought properties via the company last week tripled as compared with the figure recorded in a week late last year.
Luong Tri Thin, director of the Dat Xanh Real Estate Construction Service Company, also said that over the last five days, the company has received about 200 people each day who asked for information on land plots at the My Phuoc urban area in southern
"On average, we sell about 40 land plots in the My Phuoc area a day," Thin said. "The return of investors to the real estate sector is happening much sooner than we expect."
Property insiders attributed the real estate market's recovery to banks' cut in both lending and deposit interest rates, and property developers' massive sell-off of land and housing products.
"With the current interest rates, depositors do not receive attractive profits any longer, while the domestic securities market shows no signs of recovery. Therefore, many people decided to shift their savings to the real estate sector," said Nguyen Vu Bao Hoang, director of the Thu Duc Housing Development Joint Stock Company (ThuDucHouse).
Tran Xuan Tung, an investor in District 3, is among those who had a new investment plan for his savings.
"I have savings of VND300 million. With the current 7 per cent deposit rate, I can earn a maximum VND21 million a year if I put the money into a bank. However, I plan to mobilise more money from my relatives to buy a 70sq.m apartment at a scenic district," Tung said.
The banks' cut in loan interest rates and the cheap prices of housing were also factors that contributed to stirring up the property market, Thin said.
More houses on sale
Another reason is that many property developers sell large volumes of housing stock after taking no action for a long time.
ThuDucHouse typifies the trend. The company will sell 262 apartments at a price of at least US$1,000 per square metre later this week.
The Sai Gon Thuong Tin Real Estate Joint Stock Company (Sacomreal) plans to sell 200 luxury apartments in District 2.
However, property expert Nguyen Ngoc Duong, who is the chairman of the managing board of the Five Star Joint Stock Company, advised property investors to be cautious before making any investment decisions in order to reduce risks.
"The market has become more lively thanks to the increasing number of people who become real estate agents to study market information. In reality, the number of successful transactions still stands at a modest level," Duong said.
Everything would be clearer in the second quarter when the construction ministry's plan to build 10,000 budget houses for low income earners, and new policies to encourage the real estate market are implemented, he said.
Le Hoang Chau, chairman of the HCM City Real Estate Association, agreed with Duong and said that it was too early to say whether the local real estate market has recovered. Many customers had not yet regained their confidence in the property market, he said.
