Vietnam Real Estate Newsletter - No. 65, Week 2 Jan, 2009


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Vietnam Real Estate Newsletter - No. 65, Week 2 Jan, 2009

  1. 1. Weekly Newsletter A65 Vietnam Real Estate Week 2, January The first weekly electronic newsletter issued to registered members, approximately 100,000 reads per month VietRees, a member of joining to develop the newsletter Market situation (p.2) Real estate foreign investment (p.2) Vietnam in the world (p.3) Real estate agents (p.3) Websites of real estate companies in Vietnam (p.4) Real estate projects and prices (p.5) Real estate supply for customer groups (p.7) Real estate Legislation (p.8) Construction material market last week (p.8) Stock market last week (p.8) Research - Consulting (p.9) Market forecast, statistics expert opinions (p.10) This weekly newsletter is shared with partners, clients, members (registered) and internal VietRees together with those who are concerning or interested in Vietnam real estate market changes. Although the information is selected, synthesized from all reliable sources, this newsletter is only for reference and VietRees is not responsible for the occurring damage. Please visit the website for further Vietnam Real Estate information. When individuals and organizations quote or publish the information from our newsletter, please cite the source VietRees. According to the statistics on registration for the newsletter, the subjects making reference to the newsletter includes real estate investors; companies or units of government performing management tasks, business marketing, consulting, broking, assessment, real estate finance, construction, banking, architecture, interior decoration; domestic and foreign press agencies; and full of professional investors or individuals who have demand for real estate throughout provinces and cities nationwide; typically Ho Chi Minh, Ha Noi, Da Nang, Can Tho, Hue, Nha Trang, BRVT, Binh Duong, Dong Nai, Ha Tay… We would like to say thanks to the sponsors and all of the readers. We expect to continue to receive your support as well as your comments to improve our newsletter. Readers can print or save this newsletter on your computers to review when needed or transfer it to others. However, think of environment when you want to print it out. Free register for weekly newsletter: Please send your email to Sponsor and advestising: T: (84 8) 3948 5574 - E:
  2. 2. VietRees – Vietnam Real Estate Viet Nam Real Estate Newsletter A65 Page 2 MARKET SITUATION The decreasing real estate prices, an inconsiderable number of transactions and the period for paying Ice still not thaw on the real the capital and interests have created the most difficult situation for investors. The previous loan estate market contracts have also mortgaged the properties. When the investors have no money to pay the debts, the Vneconomy – 05 Jan, 2009 banks will put on sale of the collateral. As a result, the real estate supply on the market increases and the decreases in the real estate prices are more likely to happen. The real estate market will be caught in a vicious circle and the market is less likely to heat up within the next year. The main cause is that the market lacks the capital for further developments. Therefore, the solution that attracts most interest and can save the market is the capital. The solutions to rescuing the market such as transferring the projects, cooperating with the foreign investors or using the State-owned capital are very hard to implement due to the decline of the global economy. To intensify the market, the essential solution is encouraging the development of the investment trusts and the joint stock companies to mobilize the investment of the public and the domestic and foreign investments for the market. The investment institutions will play the intermediary role between the unprofessional investors (public, kinds of insurance funds, etc) and the professional investors on the real estate market. 2008 was a successful year for the owners of grade A office buildings for rent in Hanoi and Ho Chi Minh Pressures for price decreases City when the rents and occupancy rate has continued to be the highest until now. The early 2007, the Nhip Cau Dau Tu – 05 Jan, 2009 rent of grade A buildings was 35 USD/ m2/ month in Ho Chi Minh City. One year later, the rent exceeded 60 USD/ m2/ month. Until the second quarter of 2008, a new threshold was set to be 75 USD/ m2/ month. And at the approach of New Year’s End, the record price was set when there was a lease accepting the rent of nearly 100 USD/ m2/ month (calculated following the real rental area). Although Hanoi did not have the great leaps like HCMC, the average rent of the grade-A office buildings also went up accordingly. The average rent exceeded 50 USD/ m2/ month and the highest rent was 68 USD/ m2/ month. The fact that the prices of grade A buildings dramatically increased while the new supplies have not yet appeared has pushed the rent of grade B and C buildings higher. However, in Ho Chi Minh City, the grade-B office market has started to reverse its direction when the economic difficulties clearly appeared in March 2008. The rent also leveled off and tended to decrease. The main reason was that the new supply rapidly increased in the year while the demand started to saturate and the difficulties in the business also forced the companies to review the rent of offices. According to consultants, in 2009, the market of offices for rent will reverse its direction as compared to the year 2008. The total office space for lease will increase by about 60.000 m2, which will make the investors obliged to reduce the prices to attract and hold the tenants in 2009. However, the majority of the small and medium companies, especially the domestic ones, have tended to choose cheap offices. Especially houses, apartments or other types of real estate were converted from the other purposes into the offices with the rents of below 15 USD/ m2/month. Regarding the companies that cannot afford the rent in the CBDs, the buildings in the environs can be a reasonable solution with the prices of 20 - 30 USD/ m2/ month. The project of investment in building welfare houses in the period of 2009 - 2010 which is one of the 35 million invested in building solutions to kicking the demand and dealing with the economic decline has been completed. welfare houses Accordingly, the total capital of this solution is 35,000 billion. VietRees – 06 Jan, 2009 In which, it includes an investment of 15,000 billion in the welfare houses, the capital for kicking the housing demand of the people with the medium and low incomes and 20,000 billion VND for socialized housing program. The project is targeted at the people with the medium & low income and housing demand, including the workers in the industrial zone, export processing zone; the staff, civil servants and officers that are working at the enterprises; contributing to increasing the house supply and stabilizing the property market and meeting the social security. Financial supports aim at attracting the economic sectors to investing in building the houses for the people with medium and low income. REAL ESTATE FOREIGN INVETSMENT According to the Ministry of Planning and Investment, within 3 years (from 2006 - 2008), there are 63 HCMC leads the top 10 localities localities attracting the FDI, in which Ho Chi Minh City has leaded the list of 10 localities attracting most in attracting FDI in 3 years FDI, with 13.7% of the total registered capital. Ba Ria-Vung Tau has come second with 13.2%, the next Sai Gon Giai Phong – 07 Jan, 2009 include Ninh Thuan and Ha Tinh, Ha Noi, Thanh Hoa, Phu Yen, Dong Nai, Binh Duong and Kien Giang. The recent foreign investments have dramatically moved to the central coastal provinces and The Mekong Delta. Total FDI in Vietnam in 2008 FDI record in 2008 Source: General Statistics Office Until the end of 2008, the implementation capital has The FDI in 2008 has continued to reach a high reached 11.5 billion USD, which result. The average registered capital in this is the highest figure within 21 year has reached 51.5 million USD, increased years. by 39 million USD as compared to the year 2007. From the beginning of the year to 19th The registered capital in 2008 December, 2008, the whole has had 1,171 has exceeded 60 billion USD, projects licensed with the total registered capital which has also been a record of 60.3 billion USD which is 3.2 times bigger figure until the current time. than 2007. Sponsor:
  3. 3. VietRees – Vietnam Real Estate Viet Nam Real Estate Newsletter A65 Page 3 VIETNAM IN THE WORLD Vietnam is one of the countries Grant Thornton International Corporation has announced the global ranking board in terms of the prospects for the economic development and clearly indicated the reduction in the positive signals in the seeing the positive signs private enterprises through the observations of over 7,000 enterprises at 36 countries. Grant Thornton Sai Gon Giai Phong – 06 Jan, 2009 has come to the conclusion that the decreasing demand is the biggest threat to the private companies. According to Grant Thornton, while the big economies such as the United States, Japan, the European Union have fallen into the economic crises, Vietnam has still maintained the strong growth rate in 2008. The main reason for the decline is the impact of the inflation and the global financial crisis. This has made the positive signal of the enterprises drop from 87% (in 2008) to 32% in 2009. With this result, Vietnam has ranked 7th in terms of optimism level in 2009. The private companies have been more advantageous in the time of the economic recession because the management board of the companies can make the decisions quickly due to the simple system and flexible policies. Therefore, these companies will operate more effectively than the organizations with the bureaucratic management style. REAL ESTATE AGENTS Joint Stock Investment - Real Estate Business Hung Thinh has shown that it would start the construction Hung Thinh to build a high-grade of Hung Thinh Apartment invested by the company in the second quarter, 2009. apartment The project is located in the heart of District 10, Ho Chi Minh City, including 49 apartments with a total BDS & TS – 05 Jan, 2009 investment of 150 billion VND. The project is estimated to be completed in 2010. Ministry of Construction has said that 20 enterprises of the total company of the company and 5 shares 20 enterprises join building welfare of real estate register for investment projects to develop social housing for rent to buy. houses To participate in the development program in the society, the business must be clean and the land fund Tuoi Tre – 06 Jan, 2009 has invested infrastructure. Projects in the society must meet certain conditions on the type, scale apartments, the object is leasing and principles refund loans and the cost for leasing the regulations of Federal housing. On 5th January, 2009, 135 Investment and Construction JSC held a opening ceremony for the property Opening a real estate transaction transaction center at 31/21 Kha Van Can, Quarter 5, Hiep Binh Chanh Hiep Ward, Thu Duc Distric, Ho center at Thu Duc Chi Minh City. VietRees – 07 Jan, 2009 The transaction center is 450 m2 in size and 2 floors in height, including the departments such as: customer care, legal procedures, making transactions, property transfer and land procedures to provide all-in services real estate. Construction Joint Stock COTEC (CoteCons) held a ceremony to rule in the project by Tower Vinamilk CoteCons starts building two projects Milk Joint Stock Vietnam (Vinamilk) on 05/01/2009 past. The project is located at Lot C6A - 02, KDT Phu VietRees – 07 Jan, 2009 My Hung, Tan Phu, Q.7, HCM City, including 2 basements and 14 floors high, built area 2500 m2. Previously, the company also has the rule in construction and factory warehouse of Vinamilk on 9,000 m2 area in the industrial zone in Tien Son, Tien Du district, Bac Ninh province. Sponsor:
  4. 4. VietRees – Vietnam Real Estate Viet Nam Real Estate Newsletter A65 Page 4 Websites of real estate companies in Vietnam Property developers Brokerage Evaluation Ho Chi Minh Ho Chi Minh AREV - Hoang Quan - Company 585 - An Gia - Vietland - Company 584 - ACBR - VVFC - An Phu - Dat Xanh - BCCI - Dia Loi - Daewon - Dat Cat - Construction Him Lam - FICO - Ho Chi Minh Hoang Anh Gia Lai - Kim Son - CIC8 - Linh Phong Conic - Phuc Duc - Coteccons - Nam Long - Hung Phu - Cosaco - Phu Long - Hung Thinh 2 - Hoa Binh - Phu Quoc Land - Hoang Quan - Hai Thanh - SacomReal - Intresco - Toan Thinh Phat - Sadeco - Loc Dien - Resco - Nova - Ha Noi Thai Thinh Capital - Phat Hung - Constrexim - Thu Duc House - SacomReal - Cavico - Phu My Hưng - Tan Dien - HANCIC - Van Phat Hưng - HUD - Vietnam Land SSG - Ha Noi Incomex - Cland - Ha Noi Dong Do - Architect and Interior Decoration Phu Thai Group - FPT Land - Ho Chi Minh Petrowaco - C.E.O - Petrolimex – A2 Visualization - Gia Tue - Cat Moc - HUD - Other cities Nha Vui - HDB Viet Nam - Nha Viet - Keangnam - Dieu Hien - Nha Dep - Nam Cuong - Thien Loc - Pho Xinh - Song Hong Land - Vinaconex - Research Vincom - Ha Noi CBRE - Viet Hung - Savills Viet Nam - ACT - VietRees - ADKientruc - Other cities Ashui – Consulting Kien Truc Ha Noi - Becamex IDC - Biconsi - CBRE - Other Countries Tuan Chau - Dong Duong - GNSVINA - Eden Real - Architects 61, Sing - Company 579 - Hop Nhat - DP Architects, Sing - Duc Manh - Indochina Land - SWA, USA - Long Gia Khang - Ong&Ong, Sing - Savills Viet Nam - RSP Vietnam, Sing - Vina Capital - Surbana Vietnam, Sing - Sponsor:
  5. 5. VietRees – Vietnam Real Estate Viet Nam Real Estate Newsletter A65 Page 5 REAL ESTATE PROJECT AND PRICES On 6th January 2009, Tan Binh Construction and Investment JSC held the groundbreaking ceremony for Works start on Tan Mai high-rise the construction of Tan Mai high-rise apartment block for the customers with the above – medium apartment block incomes in Tan Tao Ward, Binh Tan District. TheSaiGonTimes – 06 Jan, 2009 The project consists of 5 apartment blocks ranging from 18 to 21 floors with a total of 752 apartments. In addition, it also includes the commercial area, the general activity room, nursery and tennis courts. The project is expected to be completed in the end of 2011 and the apartments will be offered for sale on the first phase in the end of February 2009 with the price of 12 million VND/m2. The project of Nguyen Cu Trinh quadrangular has a total area of 8.2 hectares, bounded by Nguyen Cu Nguyen Cu Trinh quadrangular Trinh - Tran Dinh Xu - Nguyen Trai - Cong Quynh in Nguyen Cu Trinh ward, in district 1. A complex will area to be a modern complex be built in the Nguyen Cu Trinh quadrangular area, including many works with multi functions such as: VietRees – 08 Jan, 2008 offices, trade-service, apartments, hospitals, schools and large scale entertainment areas. Vietcombank and Agribank will support 2.650 billion VNDs for Bitexco group (the investor of the project). In general, the prices of the high- The price change level of high-grade apartments in HCMC grade apartments in HCM City continue to decline VietRees – January, 2008 According to the statistics of VietRees, the prices of the high-grade apartment in December continued to decrease by about 6% as compared to November 2008. This has been considered to be the highest decrease from June 2008 until now. VietRees has recorded that in 2008, April and May had the highest decreases with 15% and 10% respectively. Announced prominent real estate developments during the last 2 weeks* Week 1, January 2008 Week 2, January 2009 Comeco Building (Dist.3) Hung Thinh Apartment (Dist.10) Ho Chi Minh City Ngoc Lan apartment block (Dist.7) Vinamilk Tower (Dist.7) Tan Mai (Binh Tan) Cuu Long trade center (Ca Mau) Other Areas Viettel Building (Hue) 5-star The Westin Resort & Spa (Khanh Hoa) Complex building (Hue) Approved prominent real estate developments in HCM City* December January Truong Tho apartment building (Thu Duc) Housing, apartment, residential area ReA building An Phu – Binh Khanh (Dist.12) Cecico 135 apartment building (Thu Duc) * Note: RA=Residential Area, AP=Apartment Building, HA=Housing Area, RuA=Reurban Area, TA=Tourism Area, IA=Investment Area, UA=Urban Area, ReA=Resettlement area Websites of properties in Vietnam Ho Chi Minh Ha Noi Other cities Blooming Park - Viglacera Tower - Cozyvill - Saigon Paragon - My Dinh – Me Tri RA - Flamingo Dai Lai - Dragon City - Bac An Khanh RA - Van Phu township - Preche - Ha Noi Plaza Hotel - Dam Vac Golf - SaigonPearl - Phap Van – Tu Hiep RA - Sanctuary - V-Star - Ho Tram Strip - Time Square - Sai Gon Sunbay - Other cities The Everrich - Eden Lagi Resort - Tan Da Court - Van Quan – Yen Phuc township - Furama Resort - Lancaster - Quoc Te Do Son - Sai Gon – Mui Ne Resort - The Vista - Sunspa ResortVietnam - Sponsor:
  6. 6. VietRees – Vietnam Real Estate Viet Nam Real Estate Newsletter A65 Page 6 Property Retail Price Updated on information from ACBR, Van Phat Hung, Hung Thinh, Phuc Duc, Tuoi Tre Newspaper and developers (VietRees gathered by direct surveys), listed prices can be original prices or transfer prices at current or at one week prior from the date this newsletter is issued. Typical apartments in HCM city Other apartments and land lots Area Price (million +/- Dist. (m2) VND/m2) Apartment building – HCMC BMC – Ben Chuong Duong 1 101 24.5 - Central Garden 1 81.9 28.5 - Binh Minh 2 108 16.3 + Screc Tower 3 89.5 24 V- star, Dist.7 Sky Garden , Dist.7 Cantavil, Dist.2 Orient Apartment 4 71.72 20 + * 85m2 – 16 million VND/m2 * 71m2 – 29million VND/m2 * 75m2 – 1,717 USD/m2 Hung Vuong Plaza 5 121.6 28.5 * 110m2 – 15.5 million VND/m2 * 81m2 – 27.7 million VND/m2 Tan Thinh Loi 6 73.5 13.5 Carina Plaza 8 78 15 An Suong 12 75 8.5 + Tan Kien BC 112.6 7.3 - Le Thanh BT 72 9 PN Techcons PN 133 23.9 + Sacomreal 584 TP 81.9 14.5 - Phuc Yen TB 106 15 The Everich, Dist.11 Blooming Park, Dist.2 Phu My, Dist.7 Development land lots – HCMC * 115m2 – 1,750 USD/m2 * 85m2 – 19.1 million VND/m2 Area: 95 – 398m2 Thanh My Loi 2 100 13.5 + Price: 1,800 – 2,400 USD/m2 * 117m2 – 19.45 million VND/m2 * 150m2 – 1,600 USD/m2 Phu Thuan – VPH 7 220.5 22.5 Direct contact with the investor1 ADC – Phu My 7 100 14.5 - Gia Hoa 9 100 11 Khang An 9 132 6.6 + Tan Kien BC 100 6.5 Lang Viet Kieu BC 100 12.2 + Phu Xuan - VPH NB 120 6.9 Sai Gon Moi NB 138 7.6 Apartment building - Ha Noi Preche, Dist.2 Panorama, Dist.7 Saigon Pearl, B.Thanh M5 – Nguyen Chi Thanh BD 133 28.5 * 147m2 – 2,222 USD/m2 * 166m2 – 36.7million VND/m2 * 89m2 – 2,100 USD/m2 Nam Trung Yen CG 88 17.5 - * 133m2 – 2,000 USD/m2 Dich Vong CG 62 19 + Thai Ha DD 70 23 Thai Thinh DD 68 26 - Bac Ha TX 85 15.3 - Vuon Dao TH 126 23.4 Development land lots – Other provinces My Phuoc 3 BD 300 1.25 Viet – Sing BD 300 2.9 The Manor, B.Thanh New SaiGon, Nha Be The Vista, Dist.2 Tay Nam BR-VT 100 1.8 * 74m2 – 1,810 USD/m2 * 101m2 – 1,575 USD/m2 * 99m2 – 17 million VND/m2 Licogi 16 DNI 240 3.6 * 135m2 – 1,650 USD/m2 * 113m2 – 2,050 USD/m2 * 126m2 – 16.8 million VND/m2 Samco DNI 230 4.5 HUD DNI 300 1.4 - Lang chuyen gia Tan Do LA 130 3.5 + 1 Kien A Investment & Services Co., Ltd. - An Phu Ward, District 2, HCMC - Tel: (84.8) 740 6688, Fax: (84.8) 740 6949 Danang: 225 Huyen Tran Cong Chua - T: (84) 511 836 216 * HCMC: 390 Nguyen Cong Tru, D.1 - T: 8 821 7509 * Hanoi: No.6-1D Trung Yen New Town, Caugiay - T: 4 783 1598 Sponsor:
  7. 7. VietRees – Vietnam Real Estate Viet Nam Real Estate Newsletter A65 Page 7 PROPERTY SUPPLY FOR DIFFERENT TARGETS OF CUSTOMERS * Saigon Construction Corporation investor two apartment blocks high 5-storey for workers in Quarter 1, Social welfare houses for worker Linh Trung Ward, Thu Duc Dist, HCMC. VietRees * Hung Vuong JSC has just put a 5-storey apartment building into use for cadres and workers. The company continues to petition Tien Giang Provincial People’s Committee to grant a 5.000m2 land area to construct more apartment buildings for workers with an investment of 100 billions VND. * Saigon Paper JSC has put an apartment building into use for workers at My Xuan Commune, Tan Thanh suburban district, Ba Ria - Vung Tau province. The stage 2 of the apartment building is about to be implemented with a scale of 8 storey. th * Morning of August 28 , 2008, the Ministry of Construction has signed a memorandum for the cooperation in the field of welfare housing with Korean Ministry of Land-Traffic and Marine. * Ha Noi Construction Investment JSC (Hancic) has finished 4/10 units of the 5-storey house which belongs to the housing project for workers at Kim Chung Commune (Dong Anh). * Construction and Import-Export JSC (Vinaconex) has transferred and put into use 4 blocks of houses among the total 16 blocks of the housing project for the workers at Thang Long industrial zone. * The housing area of 7,000 m2 (380 rooms) for 1,500 workers of Dong Quang Knit Limited Company at Hai Son industrial cluster (Duc Hoa Ha commune, Duc Hoa suburban dist., Long An province) has just been put into use. The total investment cost of this housing area is 20 billion VND. (02/10/2008) * The 4-storey apartment building at cluster 5, ward 8, Vinh Long town that serves the cadres, employees, professional serviceman and etc has been ratified by Vinh Long Provincial People's Committee with a total investment of over 37 billion VND. (03/10/2008) * Sai Gon – Gia Dinh Real Estate Company and Hoa Binh Phu Yen Company build Thoi An Apartment Real estate for the low income Building in District 12 with 1,000 apartments. VietRees * Construction Co. No.8 (CIC8) will invest in construction of 10,000 Keppel Land apartments & Tien Phuoc Co. will build a resettlement area including 1,900 apartments at An Phu, Binh Khanh, District 2. * HCM City People’s Committee will advance 50.5 billion to carry out the project of Vinh Loc B, Binh Chanh residential area for resettlement with hundreds of townhouses and 40 apartment blocks. * Construction Co. No.5 will invest in construction of 500 apartments at Ward 22, Binh Thanh District. * HCM City Cooperative Alliance has developed its construction investment project of housing area at Le Minh Xuan Commune, Binh Chanh Suburban District on a site of 67.49 hectares. * 50% of the house reserve at The Splendor apartment area (Go Vap Dist.) will be intended to serve resettlement demand in the district. * Dat Lanh Co. will offer 1,500 apartments to the market with the prices of 500 - 700 millions VND/unit. * People‘s Committee of HCMC has approved the project of the resettlement area on a site of 55.24 hectares at Dong Nam Cu Chi industrial - residential area in Cu Chi. * House management of Dist.1 is assigned to construct the resettlement area at 7/4ª Kha Van Can, Thu Duc district. * In early 2010, Hai Thanh company will complete 352 apartments of Hai Thanh 1 resettlement area project, Binh Tan District for the civil servants at Binh Tan District. * People’s Committee of Binh Chanh has just cooperated with Hung Vuong university Investment & Development JSC to construct resettlement area at Tan Kien commune, Binh Chanh suburban district. * People’s Committee of HCM City has just licensed Cho Lon Real Estate JSC to invest in the construction of the apartment building at No. 99 Ben Binh Dong, ward 11, district 8 in order to make the house reserve at the social welfare housing program. * People’s Committee of HCM City has promulgated the decision about reclaiming the land areas at Phuoc Kien, Nhon Duc and Phuoc Loc communes, Nha Be suburban district for the construction of the resettlement area in order to serve the project of Nhon Duc - Phuoc Kien new urban area. * The HCM City Union of Housing Co-operatives has prepared to commence the construction of Thanh Loc apartment building with 238 apartments on a site of 6.600 m2 in District 12. The Union intends to construct another apartment building with over 200 apartments at Truong Tho ward, Thu Duc district. * HCMC People’s Committee has ratified the planning of Binh Khanh residential area (Dist.2) which is built on a site of 384,019 m2 to serve the resettlement of the locals in Thu Thiem new urban area. * Dat Xanh has cooperated with Truong Son Vanguard Youth General Squad to build apartments for low- income people at Dist.12 * Go Vap People’s Committee and Go Vap Public Benefit Service Co. have bought back the house reserve belonging to Phu Gia Hung high-end apartments, Duong Quang Ham Street, Ward 15, Go Vap Dist. and Dong Hung Thuan 1, 2 apartment buildings, Dist. 12 to serve the resettlement of the locals at Tham Luong project - Ben Cat - Nuoc Len ditch. * Approximately 184,000 apartments belonging to the investment program in the construction of the social welfare houses in the stage of 2009 – 2015 with the total investment of about 49,000 billion VND have been submitted to the government for approval. (30/09/2008) * 800 social welfare houses for lease - lease to purchase will be built at 19A and 21A plots, Viet Hung urban area in 2009, which have been ratified by The People’s Committee of Ha Noi City. (16/10/2008) * 462 units of Khang Gia 3 apartment building (Go Vap Dist.) invested by Khang Gia Real Estate Investment – Development JSC will be used for the resettlement demands. (27/10/2008) The Committee for overseas Vietnamese in HCMC has showed that there have been 130 overseas Dwellings for overseas Vietnamese Vietnamese buying houses, mainly in HCMC. Those who brought houses are those who come back to and foreigners the country for their long term and direct investment, scientists, culture researchers invited to come back to the country to become experts and repatriating overseas Vietnamese. To buy houses, beside VietRees documents verifying priority subjects, the buyer must present their passport (issued in Vietnam). In the case that house buyers bring foreign passports, they must have certificates of Vietnamese nationality or documents confirming their losing Vietnamese nationality, or certificate of citizenship registration. Sponsor:
  8. 8. VietRees – Vietnam Real Estate Viet Nam Real Estate Newsletter A65 Page 8 REAL ESTATE LEGISLATION HCM City People's Committee has had a document on dealing with the difficulties of some procedures Foreign-owned companies allowed for land lease, purpose converting and the relevant financial obligations for the enterprises. to pay annual rent Accordingly, the organizations and individuals in the country (including equitized State-owned Sai Gon Giai Phong – 05 Jan, 2009 enterprises) are allowed to select the forms of transferring the land (that include paying for land using or leasing and paying the annual rent) when converting the purpose of using the land that is directly managed by the State to build the office buildings, commercial – service centers, hotels ... except for building houses. The foreign-owned enterprises are allowed to choose the forms of paying the rent for a period of land leasing or paying the annual rent. On 31st December, 2008, the Ministry of Finance has decided to promulgate one standard of classifying 5 More methods of assessment the properties and 5 methods of assessment that are applied for real estate, movables, enterprises and VietRees – 06 Jan, 2009 property rights. The decision will take effect after 15 days since its publication in the Official Gazzttee. The methods of price assessing including: comparison, costs, income, surplus and profit. The assessing enterprises, price assessor, customers and the third parties using the certificates of assessment should follow the regulations of the standards in the process of assessing the properties. The surplus method is applied for the land that is used for farming or building or has the works able to be improved or renovated. The profit method is mainly applied for cinemas, theaters, hotels, restaurants, gas stations, golf courses, entertainment centers, discos, parks ... The criteria for classifying the properties associated with the property rights in the assessment include 4 types of real estate, movables, enterprise and property rights. The Center of Environment & Resources Information and the land registration branch of Natural From 19th Jan onwards, transferring Resources - Environment has shown that from 19th Jan 2009 and later, the district and suburban ownership and mortgaging properties districts will receive the documents registering for transactions and correcting and editing the changes of executed at districts and suburban the properties (transferring the ownership) for the property owners that include households, individuals, districts overseas Vietnamese allowed to buy houses together with the land-use rights. In the meantime, the districts and suburban districts will deal with the documents for all types of Nguoi Lao Dong – 06 Jan, 2009 ownership certificates for the properties that were granted periodically. On 19th January, if the customers want to register for deleting mortgages, capital contribution in the previous transactions and the properties that were formerly registered for the secured transactions at the Center of Environment & Resources Information, they should submit the documents to the Department of Natural Resources and Environmenl or the offices in charge of registering for land use rights in districts. CONSTRUCTION MATERIAL MARKET In the previous year, at the time of Chinese New Year, the steel consumption and prices often strongly Steel industry overcomes the difficult fluctuate but in this year, the market is very quiet. According to many construction materials stores in period – Cement will be sufficient for HCMC, only in September and October, the steel consumption and prices slightly increased as the market compared to the time of previous dramatic decreases. Currently, the retail prices of steel range from 11.5 to 11.8 million VND/ ton, dropping by 300,000-500,000 VND per ton. In general, some steel Edited by VietRees enterprises are about to consume the steel inventory bought at the high prices and start the new cycles of the product. Many steel enterprises have shown that in 2009, the steel industry remains difficult due to the economic declines in the countries. The global steel output in 2009 may decrease by 5 - 10% as compared to 2008 and the steel industry is expected to recover completely in 2012. According to the Ministry of Construction, until now, the Ministry has carried out checking the cement projects implemented and invested following the plan of developing the cement industry in Vietnam by 2010 and the orientations until 2020. By the end of 2009, the total designed capacity of the cement factories of the whole country will reach 60 million tons which will be sufficient for the consumption demand nationwide (forecasted to be 45 million tons). Ministry of Construction is continuing to review, guiding the implementation of the project that will be completed in 2011, 2012 and later. By the end of 2008, the prices of construction materials such as cement, steel, sand and stone in Ho Chi Minh City had significantly decreased which has somewhat helped the investors to speed up the progress of the unfinished projects. STOCK MARKET The trading volume at the beginning of the session is very Contrary movements: VN-Index down gloomy. In the first order-matching phase, only 978,700 and HASTC-Indez slightly up shares are traded, equivalent to over 21 billion. VN - Index has lost 0.4 points to close at 313.75 points. Entering the Edited by VietRees second order-matching phase, a series of shares with the high Chart Source: Vietstock capital value have decreased points, pulling many other share codes down. VN-Index has dropped more dramatically, losing Up to date: 09 Jan, 2009 1.13 points to close 313.02 points. Closing the week on 9th January, VN-Index has slightly slid by 0.75 points to record at 313.4 points. The trading volume has been low with 7.58 million shares worth 179.94 billion VND. In sum, after 2 upward sessions and 3 downward sessions in the week, VN-Index has increased by 0.06 points (or 0.02%) as compared to the last week. At the Hanoi bourse, in spite of the slight decreases in the session, HaSTC-Index has closed the week with the slight increase of 0.5 points (or 0.47%) to record at 106.17 points. The trading volume on the whole market has reached 4845 million shares worth 143.28 billion. After a trading week, with 3 upward sessions, HaSTC - Index has added1.7 points as compared to the session on 2nd January. Free register for weekly newsletter: Please send your email to * Sponsor and advestising: T: (08) 3948 5574 - E:
  9. 9. VietRees – Vietnam Real Estate Viet Nam Real Estate Newsletter A65 Page 9 RESEARCH – CONSULTING Solutions to enhancing the competitive abilities of the Vietnamese real estate enterprises 1. Why should the Vietnamese real estate 4.1. Enhance the management ability and train In addition, the enterprises should combine with enterprises enhance their competitive abilities? the leaders of the enterprises. universities and colleges to recruit excellent Enhancing the competitive abilities of the To develop the above abilities, the decisive factors undergraduates in order to build the active young Vietnamese real estate enterprises is an are the activeness and positive striving of every team to undertake the important professional indispensable thing in the process of integration businessman. positions in the near future. especially in the difficult situation of the current real According to VietRees, firstly, the leaders of the estate market and the decline of the economy, enterprises should pay attention to enhancing the 4.7. Build up a good image to the public. helping the real estate enterprises stand firm on essential skills and update the modern knowledge. Any enterprise understand clearly that if it wants to their feet & develop in the coming years. Thereby, Some knowledge and skills should be updated and have a good public image, firstly, it has to win the it has contributed to enhancing the competitive systematized. If the basic skills are combined with customers’ trust by the quality of its service power of the whole economy. On the other hand, the effective management knowledge, there will be products, the marketing business activities and in the current situation of the market, if the the decisive impacts on the managers of the real after-sales service, etc. competitive abilities are not enhanced, the estate enterprises. Thereby, this contributes to Through the marketing and after-sales strategies enterprises will be able to suffer the losses, close improving the competitive abilities of the real estate to promote the enterprises’ own brands, if this down and go bankrupt. According to VietRees, to enterprises. work is well implemented by real estate assess the competitive ability of one real estate enterprises, it would be very convenient for them enterprise, firstly the real estate enterprises need 4.2. Improve the quality of service products and to raise the capital through issuing their shares to identify the internal factors and external factors the diversity of the provided services and bonds to the public. impacting on their competitive abilities. When the source of real estate products is However, the real estate marketing activities on According to VietRees, the essential internal growing, the quality of service products is getting the current market have not received the proper factors that the enterprises need to use to assess more attention of the customers. The quality of the investment from the investors, including the big the competitive ability of one real estate enterprise real estate service products should deserve the real estate investors. When the market was include: money that customers have paid. The enterprises eventful as in 2006 - 2007, the investors mainly • The quality of service products have to rearrange the structure of the products in focused on the phase of organizing the sales, the many segments, direct the products at the current • The diversity of provided services events and introducing the products and the needs of the customers and take the quantity to • Human resources marketing activities through media took place very offset the profits (for example: investing in the incoherently and inconsistently. • The ability to develop the market housing segment for the medium - income and The investors have not created the difference or • Trademarks and the prestige of the real estate low-income people). prominence for their real estate products besides enterprises the architectural design elements. Many investors • Financial ability 4.3. Build up the market information have had many large real estate projects and • Organizational and management ability of the department; regularly follow and fully update traded products on their own but they have not had real estate enterprises the movements of the market through the mass the marketing/business departments, marketing • The real estate information system media channels and the actual surveys. departments or the professional staff that are in • The level of using the information technology This is not work that any enterprise can also well charge of marketing. The external factors influencing the competitive perform while the real estate market information In the current difficult situation, a few real estate abilities of the real estate enterprises can include has become less transparent as now. When there companies have had many new marketing ways, the macroscopic policies of the government – the have not been State agencies that can organize, aiming at the real customers. law factor, the domestic and foreign competitors, collect and analyze the market information, the real the capital market, the psychology of the subjects estate enterprises should choose the prestigious 4.8. Expand the channels of raising capital for joining the market, etc. For these external factors, units to agree on providing suitable and essential the real estate enterprises. the real estate enterprises are very hard to information for their enterprises. In fact, according The current capital source of the real estate intervene, change or adjust. Therefore, the to the VietRees, it has been so hard for many enterprises has mainly come from the commercial enterprises only need to thoroughly study and businesses to carry out this work on their own. In banks. Although the banks have reduced the loan understand the external factors and focus more on the case that they cannot build up and effectively interest rates, the loan conditions have become the internal factors. operate a team to handle this work, they can more difficult than before. As a result, only a few perform this through professional units that real estate enterprises can borrow money from this 2. How to enhance the competitive abilities of specialize in researching, providing the market main capital channel. A few companies have the Vietnamese real estate enterprises information and consultancy in terms of real estate. issued the shares on the stock market but they To enhance the competitive abilities, one of the could not raise much capital because the stock things that the enterprises need to do is to actively 4.4. Expand the business investment market market has been freely falling. evaluate their real ability and find out the most following the specific routes depending on the In addition to the capital borrowed from the banks basic strength in order to promote the flexibility in scientific results of the market research and mobilized from the stock market, the each economic period. surveys. enterprises should expand issuing the enterprise According to VietRees, only when the real estate bonds and real estate bonds from the real estate enterprises possess, construct and promote their 4.5. Build up the legal department in each projects that they invested, meanwhile, promoting key competitive abilities in comparison with other enterprise having the function of offering legal the works of the joint-venture, cooperation and competitors, they can have the sustainable and consulting to the managers and hold the works merger for development. long-term development. of preventing the crisis risks. This definition will help the enterprises build the Summary: 4.6. Improve the real estate knowledge of the effective development and competitive strategies. In the current market situation, if the competitive current employees and attract the good abilities have not been enhanced and there have 3. The weaknesses in the competitive abilities employees. not been the basic strategies, the enterprises will This is the weakness of most of the Vietnamese of most of the current real estate enterprises be able to suffer the loss, close down and go • The quality and competitive abilities in terms of enterprises in general and the real estate bankrupt. To ensure the objectivity in assessing enterprises in particular. To have highly management are poor. the competitive abilities, VietRees would like to • The human resources are not methodically professional staff, the enterprises need to have the advise the enterprises to perform this work strategies for holding and attracting talents. To trained in terms of the real estate field. seriously and probably need the help of the enhance the work effect, every enterprise should • The real estate information lacks transparency. prestigious consultants on the market. offer professional training courses to the key staff • The quality of work is bad. On the other hand, no matter how they assess, in order to suit its requirements in each period. • The financial ability is low. they also need to have the bases to compare with Therefore, the effective training programs and other enterprises that are in the same operation • The weakness in terms of brand. plans have been one of the methods that the field, market segment and directly and indirectly • Not really aiming at their right customers. enterprises have used to enhance the competitive compete with them. abilities. Meanwhile, the enterprises should pay • Not understanding and strictly execute the law. attention to building up the reasonable treatment 4. Solutions to enhancing the competitive policies such as salary policy, bonuses to keep the stability in their volume of staff, especially the abilities VietRees – December 2008 excellent staff. Free register for weekly newsletter: Please send your email to * Sponsor and advestising: T: (08) 3948 5574 - E:
  10. 10. VietRees – Vietnam Real Estate Viet Nam Real Estate Newsletter A65 Page 10 REAL ESTATE MARKET FORECAST * Note: Information on market forecast is only updated every 4 periods (after one month) by VietRees – January, 2009 The transaction situation of apartments, townhouses and project ground bases in December has General tendency of Ho Chi Minh continued to decrease. According to VietRees’s forecast, the real estate prices can continue to go down City market with the decrease of approximately 5% per month in December and before Lunar New Year. The property prices in 2009 are hardly likely to be on the upturn. The successful transactions at the end of December last year was a little bit higher than the previous months. However, the transactions have just focused on the segment of low-value townhouses and apartments. For the group of the high-grade apartments, the rate of the successful transactions was quite low and inconsiderable. The amount of overseas national currency exchange at the end of this year has dramatically dropped and not been invested in the real estate field as in the previous years but it has been used for the production or paying the debts. The difficulties in the credit situation, the deflation of the economy and the coming maturity of the contracts mortgaged by the properties have made many properties to be sold out at the prices that are quite low, even lower than the initial selling prices of the investors. The total outstanding real estate loans have accounted for nearly 10% of the debts of the whole the banking system, therefore, the banks demand payment of the debts. And as a result, many investors have to sell their projects and products at the low prices. Many real estate enterprises have lacked the cash to maintain their business and it is very hard to borrow more money from banks. On the other hand, currently, some banks have consigned the mortgaged high-grade properties of the customers for sale and extended the debts so that the customers have more time to sell their properties in order to pay the loan contracts. The supplies of the apartments belonging to the medium and low segment have been quite limited; Apartment market therefore the market belonging to this segment has also seen no changes as compared to the previous month. Many high-grade apartments with low prices (mainly belonging to those who sell out their properties) are hunted for. Meanwhile, the situation of checking the prices of the sellers has appeared on the market through the self-listed selling prices that are quite low. The sellers have really not wanted to sell because they will suffer considerable losses if they do so. However, if they offer the high prices (though suffering little losses), it will be very hard for their properties to be sold at this time. The high-grade apartments have seen few customers, especially many apartments in Phu My Hung and many other areas in District 2 and 7. Although the prices have dramatically declined (over 50%), there have been few buyers. With the movements of the current market, according to VietRees, the prices of the high-grade apartments will continue to go down after Lunar New Year. Project ground base market Although the prices of the project ground bases have considerably dropped, they have still been too high to those who have real housing demands. As a result, the transactions have been are also very low. If these people have real housing demands, they will choose the apartments or townhouses, not buying ground bases. Therefore, the transactions have still been very slow. The prices of many ground base projects in some areas of District 7, Nha Be have declined by 60% but the successful transactions have still been very scarce. Many investors are worried about the ability of selling their real estate in the current difficult situation of the economy and the frozen market. Real estate companies Many previous companies that expanded their real estate business investment have now come back to their main business fields. Many secondary investors have faced many difficulties such as no cash and no customers. If this situation continues, the real estate investors who lack the capital will face bankruptcy risk; have to sell the projects at low prices and withdraw from the market in 2009. In fact, according to VietRees, there are a lot of middle-ranking and senior managers have withdrawn or temporarily withdrawn from this field or reciprocally convert their assignments between the real estate companies. According to VietRees, the real estate investors should switch to the apartment projects with suitable prices for the medium-income people, instead of aiming at the projects with the high prices like before. The medium-price projects can be sold quickly; help turn over the capital and take back the capital quickly. Then, the capital has been continued to be used for reinvesting in serving the customers who have the real demand because the demand of this group of customers has still drawn little attention and not been properly exploited yet. Forecast in 2009 The real estate market with the current movements under the growing impacts of the financial crisis and global economic recession, the Vietnamese real estate market has seemed to be gloomier. VietRees has shown that there is a faint possibility that the market will recover in 2009. The market in 2009 will have more difficulties than in 2008. Many real estate investors and speculators will face the bank payments while the real estate prices have still not seen any signs of the recovery. According to VietRees, after Tet holidays, the real estate market will be an attractive playground and opportunity for the investors with the large capital and long-term investment strategies. The decline of the market will minimize the speculation. The market will be under the control of buyers, not sellers like before. For this reason, the potential real estate enterprises should build the long-term development strategies and actively work in the research and development, especially seriously investing in researching the market and customers; sustainable developing and avoiding the investment on a large scale in the current difficult situation. The coming investment trends The tendency of switching to the investment and development of the low-and-popular-price houses to attract the majority of customers is getting clearer. Many enterprises are planning to promote their for Vietnamese real estate investments in this market segment. It is expected that those who have medium and low incomes have enterprises many opportunities to approach this supply in the future. According to VietRees, enterprises should invest in the apartments with the relative areas of 40 – 60 m2, good structure, relatively good materials and equipments – (not need to be high-level ones), the selling prices of nearly 10 million/m2. The apartments with the value of around 400 – 600 million VND/flat will be likely to attract many customers. The customers that should be aimed at include the young families, students, workers and civil servants in Ho Chi Minh. In fact, some foreign investors are interested in this market segment. Therefore, the domestic investors should be quicker because, according to VietRees, Vietnamese enterprises can have more advantages than other foreign enterprises in this market segment. Free register for weekly newsletter: Please send your email to * Sponsor and advestising: T: (08) 3948 5574 - E: