Real Estate Market: Finding Opportunities in Difficulties

(Baonghean)- The difficulties of the world and domestic economy, banks tightening credit lending for real estate investment and construction, scarce cash flow make the real estate market quiet at this time. However, some investors are still not discouraged, pushing investment to find opportunities to wait for the right time...

“Misery” is the word we hear a lot from investors building housing projects, apartments, and urban areas at a time when the Government tightens investment to control inflation. So since February 2011, Resolution 11/CP on controlling inflation took effect, banks were ordered to “cut” loans for real estate investment... causing investment and credit activities to wait for new mechanisms and policies. While the price of gold, the price of dollars, and the price of raw materials continuously skyrocketed, the real estate market “froze”. That is the reason why main investors and secondary investors are miserable because liquidity in real estate is slow, the amount of money invested in this market is difficult to recover. Many projects are stagnant and quiet. Construction sites are delayed, machines are waiting, workers are unemployed. Meanwhile, many investors are heavily indebted to banks because their apartments cannot be sold. There are investors in Vinh city who have to pay over 6 billion VND in interest and principal to the bank every month, while since the beginning of the year they have only sold a few apartments.

Tecco Central Company speeds up construction
high-rise apartment building in a complex service area
and Hung Loc housing

In the face of these difficulties, some investors are still determined to invest in projects waiting for opportunities. Vinaconex 9 Joint Stock Company is investing in the 12-storey CT, B project with a total investment of 130 billion VND. Although the CT, A building has been completed for the past two years, there are still some unsold apartments. However, the company is still determined to push forward the construction of the CT, B building along with the adjacent villas in Hamlet 19, Nghi Phu Commune. Mr. Pham Van Hai - General Director of the company said: "In the difficult context, but thanks to the projects in Hanoi of the Corporation that have been put into effective business, the company mobilized capital from shareholders, determined to complete the project on schedule so that when the market increases, there will be products to sell to customers". The CT, B high-rise project has increased in price a lot compared to the CT, A project (total investment of 50 billion VND), but the apartment prices have not increased significantly. If in CT project, A, the price of high-rise apartment is 9.4 million VND/m²The price in CT and B is 10-10.5 million VND/m²According to the company's leaders, with reasonable prices, more customers will come and hopefully the company will recover its capital faster.

Tecco Company is also in a similar difficult situation when business projects are tightened capital. Some projects are planning to invest but are delayed. However, the company is still determined to mobilize capital to invest in the Le Loi social housing and service complex project, Hung Loc social housing service complex project and Nghi Kim housing service complex project. The company has completed two social housing buildings in Hung Loc and Le Loi, attracting a lot of customers to buy houses after the city approved low-income home buyers. The company has also worked with the Bank to get support from the bank for home buyers. For social housing projects, banks are allowed to lend a part, which is an advantage for the company to implement the project on schedule.

In addition, some high-rise apartment buildings of Nghe An Petroleum Construction Corporation in Ha Huy Tap ward have also been restarted. The investor is determined to complete the rough construction in the third quarter of 2011.

Article and photos: Chau Lan.