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Sluggish real estate projects face suspension risk
BXD 09:51, 2012/10/28
Property projects that have yet to finish site clearance and compensation issues despite being granted licences should be suspended, said Construction Minister Trinh Dinh Dung at a recent press conference.

The Hanoitimes - Property projects that have yet to finish site clearance and compensation issues despite being granted licences should be suspended, said Construction Minister Trinh Dinh Dung at a recent press conference.

 
The local property market has been in a very difficult situation as land and housing prices in all segments have sharply decreased, which has caused financial problems, particularly for small and medium-sized firms.

“In this context, projects which have yet completed site clearance and compensation activities should be stopped because the o­n-going massive investment would push investors into risk of bankruptcy due higher supply compared to the demand,” the minister added.

The Ministry of Construction has asked agencies to consider current real estate market demand. Localities are also required to check property projects to define which should be cancelled, delayed or re-considered.

Developers at the press conference also requested that the ministry review policies o­n investment procedures, interest rates and land use fees.

Nguyen Manh Ha, Head of the Department of Housing and Property Market Management under the Ministry of Construction, said Hanoi had seen a great rise in the number of unsold apartments, especially in suburban areas, even though prices in almost every price range have sharply decreased.

Around 40,000 apartments currently lie vacant. In Ho Chi Minh City, roughly 20,000 apartments are still up for sale.

Economist Vu Dinh Anh said "If an average apartment costs about 1 billion VND or 47,000 USD, that means the total value of the unsold apartments in the two cities is probably in the region of 2.86 billion USD."

 



 

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