Access to credit key to reviving property market

HCM City (VNA) - Experts have sketched different scenarios about the
fate of the real estate market in Ho Chi Minh City in the coming months
as it continues to bear the impacts of the international financial crisis.

However, they agree that access to bank credit will be crucial to the
markets' ability to recover after nearly 10 months of stagnation.

Nguyen Quang Trung, general director of the Saigon Green Real Estate
Development Joint Stock Company, said the market could not recover unless
the government eases credit.

Since most realty firms depend on bank credit, many of their planned
projects and even those underway have been suspended, according to him.

Duong Tuan Tu, general director of the Anh Tuan Housing Limited Company,
said to revive the real estate market, banks needed to lend builders to
speed up their projects.

At a seminar held last week by the HCM City Real Estate Association and the
National Financial Supervisory Commission, Le Duc Thuy, chairman of the
latter, said the government had not prohibited banks from lending builders
but only recommended caution.

Tran Hoang Ngan of the HCM City University of Economics said when the
Government tightened monetary policy to fight inflation, both realty firms
and buyers were hit by the high interest rate.

A rate of 12 to 15 percent was acceptable for them, he said, adding that
whether borrowers mortgage property to borrow for their personal use or to
invest in real estate, banks did not face major risks.

Housing and land-use right prices in HCM City will remain relatively
unchanged if the government eases bank credit. Otherwise, the prices will
fall below 70 percent of early 2008 prices, according to industry insiders.

Le Hoang Chau, Chairman of the HCM City Real Estate Association, said that
in many market segments, housing and land-use right prices had fallen by an
average of 40 to 60 percent, and even 70 percent compared to those in the
beginning of this year, when they were at their highest.

"If banks do not extend the deadline for customers who have borrowed money
to purchase a home to pay off loans, but consider the loans as overdue debt,
it is certain that the price will fall far below 70 percent because many
people will be forced to sell off to avoid foreclosure by banks," Chau said.

Pham Van Hai, general director of the ACBR Company, said that a number of
local commercial banks, foreign banks and some funds had resumed lending
customers who wanted to buy houses.

However, lending conditions were very strict to ensure repayment, he said.

Nguyen Van Giau, the governor of the State Bank, announced at the
beginning of this month that banks were allowed to ease credit for real
estate projects.

However, according to many experts, the key point to help the market quickly
revive is to have policies to boost demand.

HCM City Business Association chairman Huynh Van Minh said that real
estate businesses lacked funds to rescue themselves, because banks were not
making new loans.

According to statistics from the VietRees market research company, as
buyers wait, real estate transactions stagnate, and housing and land prices
keep falling.

Dang Hong Anh, Board Chairman of the Sacomreal Company, had a positive
outlook for the real estate market in the next few months. He said some
banks already had policies to restructure debts and extend deadlines until
June 2009 to customers who had bought apartments.

And from now until then, lending interest rates might return to the level of
12 percent a year, when it would be more appropriate to invest in or buy
housing and land, Anh said.-Enditem