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In this paper, we will focus in four main factors which had the most impacts on the 2010 residential market in Ho Chi Minh City.

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HO CHI MINH RESIDENTIAL MARKET IN 2010 (MBA Intake 19) Lecturers: Prof. Dr. BRUNO PONSON Group 11: LE NGOC HA TON THE VINH LOC NGUYEN HONG TRANG TRUONG THI NGOC THUY Ho Chi Minh City, 19th February, 2011 CONTENTS I. Overall Ho Chi Minh Residential Market in 2010: Since Vietnam economic enters the innovation revolution, many markets have been established and developed. These markets contribute to impulse the economic and society of the country. The real estate market is one of the above mentioned ones. Despite being established for just a short period of time, the real estate market is eventually having a part in improving the usage and business investment in real estate's effects. There are many sub sessions in this market such as residential session, office session, retail session, etc. Although being concentrated in high demand parts, residential session in Ho Chi Minh City last year still was not really recovered. It even, according to the forecast of some specialists, will be quieter in 2011, especially in the first half. In an economy that is just recovering from the financial crisis, there were many factors which helped delay any possible demand recovery. One of the reasons is that there were too many supplies. Residential supply in 2010 has continually increased. Total supply has reached approximately 16,000 units, representing an increase of 74% compared with the entire year of 2009, of which 78% is categorized as Grade C, which has an average price of around $780-$810/ sq m. 1 Expectations are that the supply will keep growing over the next three years , which will put more pressure on project pricing strategies. Another reason lies in the high price. While there were many factors affecting the price, the buyers wanted to wait to have the possible best price. Besides, most of the secondary investors currently are individual ones, not big organizations. Therefore, when there was fund difficulty, they had to rely on bank loans which led the market to another difficulty. ...read more.


Additionally, a brake on real estate speculation will make the market develop more sustainably. The enforcement of the Decree 71 aims to weaken speculation and reduce market liquidity. Tight monetary policies and limited lending for real estate investments are the devastating news for the real estate market in the short term. In the long term, the government's policy for the sustained real estate market development is necessary. With the impact of the decree 71, in 2010, the residential session reduced trading volume in quiet. The secondary investors, individual investors ... encountered many difficulties. However, it is undeniable that the Decree will contribute to promptly solve with violations of the investment, raising capital from investors in the housing development projects, new urban areas, market stability in areas with occurrence of "land fever", no transparence in the land transfer. It effects on orienting development of market with transparence. Decree 71 would seem to be an effort to consolidate all the legislation relating to residential housing in general while providing clarity on various issues directly affecting developers in Vietnam. The clarification on completion of foundation works and clarification of parking spaces have been long overdue. The requirement for Prime Minister's approval could potentially be a major stumbling block for large scale developments. As with all legislation, the effectiveness of Decree 71 will very much depend on how the authorities seek to implement the new provisions. Decree 69 The Government has recently issued Decree No. 69/2010/ND-CP dated 13 August 2009 ("Decree 69") providing additional regulations on matters such as land use zoning, land prices, land recovery, compensation, assistance and resettlement. One of the issues arising from Decree 69 is Article 11 which sets out circumstances whereby re-determination of land prices would be applicable. Real estate companies said planned land-use and compensation fees would eat into their profits and could even force them into liquidation. In this, new land fees for real estate enterprises will be based on market prices. ...read more.


But in this stage, 2010, investors must be careful in the decisions and develop their own funding. They have to answer for their market segment participation is, who your customers are and what products the investors can be developed to best satisfy the legitimate requirements of target customers. Only when this issue was identified, new investors started to implement the project. So, after two years to cope with the impact from the economic crisis, there are positive things, is the real estate market has been purged of audience participation. Stand in the market over the period of crisis is the real estate developers are not only factors such as economic potential and strong management capabilities, but also must know what we can offer and provide for who ... Year 2011 will remain difficulties, the problem may be solved by the market in 2010 will continue to be "dissected" in 2011. But the housing market in Ho Chi Minh City will develop more professional. The macro-economic issues in the country and the impact from the world economy is not stable will make certain to impact the real estate market. Policies related to real estate market, especially policies on land planning and mobilization of capital will be the variable that investors must be "read" carefully. Investors will have to solve the target audience toward the project, develop unique ideas and capital. The housing projects for condominiums policy of Ho Chi Minh City has caused a major hit in public opinion, creating the trust and hope of the people on the housing development policy of the Government . Range of social housing policy for the other subjects were also deployed a powerful and admirable results. With these results and business investment in housing in Ho Chi Minh in 2010, with more flexible mechanisms, transparency, and encouraging market development in the right direction, the viability of this industry in 2011 will certainly promises much hope for a new breakthrough. ______________ 1 Cushman and Wakefield's statistic. ?? ?? ?? ?? ...read more.

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