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"Vietnam Real Estate - looking back 20 years": The Rise and Fall

Post time: 12/10/2013

Dia Nam Real Estate Forum ( DNRE ) is starting after December 01.2011 Real Estate Exchange Street South ( DNRE ) opened and began operations .

DNRE Forum started thematic series " Vietnam Real Estate - looking back 20 years," as the Preamble to the next Session , more topical and more in-depth orientation .

Field development , investment and real estate business in Vietnam is still very young and primitive , but also spent quite a lot of changes , ups and downs . Speaking of Real Estate Market Vietnam , we can not limit ourselves to the vision 20 years . But in terms of " ups and downs " , the " legal " ( the interest of the State and the impact on the real estate market ) , the limit of 20 years ( 1990-2010 ) was a period sufficient to consider , research and comment .

First fever (1993-1994)

Real Estate Market Vietnam had " first rush " - takes place in two years (1993-1994) , in which the real estate market special " sauce " strong in the segment of land and land use rights . The reason is that demand for housing , land of the land to residential and business is increasing , especially in urban areas , but relations assignment , sale of residential land has emerged from the years before the Land Law (1993 ) was born .

During this time of the land use rights organizations , households and individuals are not required by law and transferring , purchasing land is prohibited . Therefore, the transfer relations , sales of residential land in this period took place spontaneously and completely transfer relations , trade underground .

1993 Land Law takes effect , strongly impact the real estate market to market " fever " strong in the segment of land and land use rights . Subjects primarily invested in land of the first land rush as companies such as Minh Phung - Epco , Tamexco ... with bank loans and investment objects is the second individual to capital investment largely idle capital .

First Freeze (1995-1999)

Following the craze first batch freeze lasted for 5 years ( 1995-1999 ) which is believed to cause the State to use administrative measures ( Decree No. 18 ) intervened to " first rush " , some speculators to sell land quickly returned to the capital recovery bank .

Since the beginning of 2000 , changes in the real estate market in Vietnam is complicated. If the first 2 years from 2000 to 2002, real estate prices , the boom began in late 2002 and 2006 Real Estate Market moves to cool down quickly , but the market is still trading " closed tape " . The cause of this condition and its consequences affect how economy is concern assessment .

Fever on the second (2001 - 2002) or stage property market boom

Land rush second place by investors to predict and evaluate policies for overseas Vietnamese to buy houses and land price issued new prospects for the housing market , many investors who bought land in the area around along . According to estimates by the Institute of Economics Ho Chi Minh City , the amount of investment reached about $ 6 billion . Notably, it is only " buried " in the ground instead of creating a commodity houses and other buildings . Data from the Department of Land - Land that over 6,000 hectares of land in the urbanized coastal areas , only about 10 % of the area with infrastructure , housing ! Therefore it can be concluded that the preliminary needs of the housing market in the second land rush is virtual demand and property prices is the price of much speculation , is not worth it . Segment " fever " strong in the market at this stage is the project frontage and land

After a long quiet time , since 2000 , housing prices began to fluctuate , then the price increased continuously and reached its peak around the second quarter of 2001. According to many experts , the real estate prices in Vietnam at this stage is the most expensive in the world, even higher than some of the major cities of the industrialized countries . The DNRE expert assessment and provide some condition causes "explosion " in the real estate market as follows :

Due to economic growth leads to high demand for land for business and housing needs of the constantly increasing population ;

Due to the speculation in the housing business increased strongly ;

Due to the State's policy on land ;

Due to the expectation factor in the profitability of land endless ;

And finally, the lack of information about housing prices .

Period Property market freezes second time (2002 - 2006) :

From late 2002 to 2006 Real Estate Market place quiet , even " freeze " as many comments . Real Estate Market in colder years later . According to statistics : 2003 successful real estate transactions fell 28 % in 2004, down 56 % and down 78 % in 2005 !

Thus, the second installment freeze has lasted for 5 years ( 2002-2006 ) . When real estate loans issued several interventions such as indicator 05 days of termination of the pilot 4/15/2002 subdivision retail households , 08 on 22/04/2002 directive . the housing market has cooled as " hitting " hit the top benefits of creating value . But for most of this investment is idle private capital needs to be sold quickly recover capital repayment not occur as the first . So even though the fever has stopped but land prices have not dropped in price before the rush .

Land rush Third (2007 -2008)

Unlike land fever twice before, once this land rush with a strong focus on segments Apartment and villa . If the land before the fever is due to administrative policy of the Government with two bills to create conditions for Real Estate Market Vietnam growth is the third land fever also causes a completely different effect . DNRE want to emphasize a few key reasons :

First, the growth of FDI investment in Vietnam made impressive economic growth during 2003-2007 .

Second, in 2006-2007 , can be seen as quite a glorious year for Vietnam Stock Market and everyone involved as well as easy to make money from Stock Market . This creates a large surplus of capital stock winners moving into real estate market . Because the profits from securities should create conditions for high-level segment of Real Estate " fever " strong .

The " hibernation " followed by

And real estate market fell into " hibernation " since 2008 until now . And what's going to come up and Stock down dramatically and also tightening credit inflation of the Government . Capital flowing into real estate " exhausted " . Premium segment freezes completely, Real Estate Market " long -term hibernation " .

The " hibernation " has lasted 5 years as the freeze time before that? The answer in the next vebai DNRE Forum .

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