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  1. 1. Weekly Newsletter A64 Vietnam Real Estate Week 1, 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) Research - Consulting (p.9) Market forecast, statistics expert opinions (p.10) Construction material market last week (p.10) Stock market last week (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 A64 Page 2 MARKET SITUATION The year 2008 can be considered to be the year of many rare movements on the global real estate 10 outstanding events of real market in general and the Vietnamese real estate market is no exception. estate markets in 2008 1. Real estate prices continuously dropped - This was the first time in many years that the real estate Vneconomy – 30 Dec, 2008 market witnessed the consecutive sharp falls in prices within 3 months (starting from April). The sharpest price falls occurred in the housing segment, especially the high-grade houses, with decreases of 20- 40%. The price falls were anticipated by experts who said that the price decreases would come after an overly hot development period. The main reason behind the sharp price falls was the government’s policy on tightening real estate credit aiming to curb inflation. 2. FDI in real estate saw record high - The Ministry of Planning and Investment (MPI) has estimated that up to now, the foreign direct investment (FDI) in real estate has exceeded the total registered FDI of 2007. While the economists have warned of the bad consequences of the overly high foreign investment in real estate, MPI’s Foreign Investment Agency has said this is not a concern. 3. Hanoi has been expanded - On 29th May, the National Assembly officially ratified the resolution on expanding the capital Hanoi. For the past year they have been pocketing money from trading land plots Hanoi was expanded to. The land prices in Ha Tay, Luong Son or Me Linh - the localities merged into Hanoi - have also rapidly increased accordingly. However, after Hanoi was officially expanded, the real estate prices in the above areas have also decreased correspondingly to the previous increases. 4. Ministry of Natural Resources and the Environment gets right to define land prices - On 1st December, 2008, the Prime Minister signed a decision on assigning the Ministry of Natural Resources and the Environment, instead of the Ministry of Finance, to define land prices. All of the matters relevant to the duties and rights of land assessment, records, documents and the civil servants working on the land assessment of the Finance Industry will be transferred to the Department of Natural Resources and Environment 5. Investment in golf courses boomed - The whole country had 144 projects licensed just within a half of this year. The reason of this boom is the profits that golf course projects have brought. However, before the warnings of the experts on the corollaries of the golf course boom, some local authorities have stopped licensing golf projects. This has made the investment wave cool down. However, this does not mean that the movement will stop, as this remains a profitable investment channel. 6. Rushing to open real estate trading floors - Despite the gloomy real estate market, the investors have still rushed to open real estate trading floors. However, according to the Ministry of Construction, while the number of trading floors has increased rapidly, the quality of the floors has remained low. In the near future, the Ministry plans to set the requirements on the standard floors in order to create the advantages for both buyers and sellers as well as ensure the transparency of the market. 7. Real estate shares not favoured - The influences from the real estate market have led to the sharp falls of real estate shares. However, according to experts, the decline in the real estate and stock market have been the opportunity to own the real estate shares at low prices, creating conditions to take the first opportunities when the market recovers. 8. The movement of selling houses on paper - The movement is considered both the cause and the consequence of the real estate bubble. According to regulations, investors are not allowed to raise the capital when the foundation of the projects has not been completed. However, investors have found out the method of “contributing the capital to the projects” to attract the capital from the customers. 9. The odd bet - Many people have shown that the bet worth 100 billion between the groups of veterans, architects, etc and Keangnam group like a comic clip has helped the real estate investors to reduce the stress when the real estate market is experiencing the difficult periods. 10. Consultants were threatened with lawsuits - Some real estate developers in HCM City said that the information about real estate prices released by the consultancies were incorrect. This matter has not only affected the prestige of the consultants but also warned the management organizations to quickly build up the price index for the real estate market. REAL ESTATE FOREIGN INVETSMENT On 26th December 2008, the Ministry of Planning and Investment of Laos licensed the project of the 5- Long Thanh Golf to build 5-star star resort in Vientiane, Laos invested by Long Thanh Golf Investment and Business JSC(Vietnam). hotel in Laos With a total investment if nearly 1 billion USD, the project is built on a site of 557 hectares, including a VietRees – 27 Dec, 2008 golf course, a 5-star hotel and a high-grade villa area. The construction period is 50 years and the investors can ask for the extensions if they have requirements. Starwood Hotel & Resorts Worldwide has shown that it has completed the contract with Phat Dat real Starwood to build resort at Cam estate company about the construction of Westin resort at Cam Ranh Bay, Khanh Hoa province. It is Rang, Khanh Hoa expected to be opened in 2012. Kinh Te Do Thi – 29 Dec, 2008 The Westin Resort & Spa, Cam Ranh – the first hotel with the brand of Westin in Vietnam - will have 330 rooms overlooking the sea, 8 restaurants, spas, children clubs. Sponsor:
  3. 3. VietRees – Vietnam Real Estate Viet Nam Real Estate Newsletter A64 Page 3 List of countries/territories investing most in Vietnam until December, 2008 FDI record in 2008 Source: General Statistics Office Until the end of 2008, the The list of countries and territories investing in implementation capital has Vietnam in December, 2008 has seen no reached 11.5 billion USD, which change as compared to the last month. is the highest figure within 21 Singapore, Brunay & Canada have exchanged years. the orders and the order of the remaining countries is unchanged. In which, Malaysia has The registered capital in 2008 has still been the biggest investor with 14.9 billion exceeded 60 billion USD, which VND, accounting for 24.8% of the total has also been a record figure until registered capital. the current time. VIETNAM IN THE WORLD HCMC real estate shows the leading According to the latest report of PricewaterhouseCoopers Group (PwC) and Urban Land Institute, Ho Chi Minh City. Ho Chi Minh of Viet Nam is one of the cities that have shown the most prospects for potential in Asia development in Asia - Pacific in the real estate field. Vnagency Ho Chi Minh city has gained 5.25 points in the assessment of the prospects for the development in 2009, ranked second after Bangalore (India) with 5.27 points and coming before the 17 other Asian cities in the ranking board. In the specific real estate fields, Ho Chi Minh City has also reached a very high number of points, ranked 1st in trading offices, retailing real estate and leasing apartments, ranked 3rd in the hotel transaction, ranked 2nd among the markets showing potential for the industrial works and distribution. Assessing the general situation of Asian real estate market, PwC has shown that most of the real estate market in Asia - Pacific until now has not yet been greatly affected by the global financial crisis. According to PwC, the profit in this area at this region is still very high, creating a big attraction to investors. REAL ESTATE AGENTS On the morning of 26th December, Savimex Joint Stock Company and EVN Land held a groundbreaking Savimex starts construction of Ngoc ceremony for the construction of Ngoc Lan apartment block in Phu Thuan Ward, District 7, HCMC. Lan apartment block With a total investment of over 500 billion VND, the project is built on a site of 5,442 m2, including 18 Nguoi Lao Dong – 27 Dec, 2008 floors with 275 apartments measuring from 53 - 205 m2/unit. It is estimated to be completed and put into use in the second quarter of 2011. According to Investco Construction Investment & Development JSC, the company has won the bid for Investco wins the bid for Estella the construction of Estella Residential Development in An Phu Ward, District 2, Ho Chi Minh City. building, Dist.2 The phase 1 of the 6 blocks of 22 floors among the total 8 blocks of the whole project is executed with VietRees – 29 Dec, 2008 the total value of about 1,500 billion VND. 586 Transportation Construction JSC has shown that it would sell 20 houses belonging to the projects in Special offers on Phu An urban Phu An urban area, Can Tho South Vietnam invested by the company with 15% discount. The area, Can Tho South promotional period lasts from 27th Dec 2008 to 16th Jan 2009 on the occasion of 5-year anniversary for the project construction. BDS & TS – 29 Dec, 2008 In addition, the company is also planning to build the high-rise apartment building for the low-income people with the areas of 50 - 75m2. People's Committee of Thua Thien - Hue has licensed Trung Quy Investment JSC to execute the project One more complex building licensed of Trade and Services center in town, Phu Bai, Huong Thuy district, Thua Thien - Hue. in Thua Thien – Hue The project includes the trade center (3 floors), 3-star hotel (4 floors), 2-floor restaurant and the other VietRees – 26 Dec, 2008 auxiliary works. The total area is 2 hectares and the total investment is 117, 8 billion. The construction is planned to be commenced in the 3rd quarter of 2009. The project is expected to be completed and put into use after 2 years. Sponsor:
  4. 4. VietRees – Vietnam Real Estate Viet Nam Real Estate Newsletter A64 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 A64 Page 5 REAL ESTATE PROJECT AND PRICES Construction of the biggest trade centre in Ca Mau, the Cuu Long Trade Centre, was kicked off on Prepare to build the biggest trade December 27 by Petrovietnam Fertiliser and Chemicals Corporation. The centre covers 9.07 hectares in center in Ca Mau the urban centre in the North-East of Can Tho city. Ha Noi Moi – 27 Dec, 2008 The total investment is expected to be up to hundreds of billions of VNDs and divided into many periods. The project includes: 1 commercial center and office building with the floor area of over 1200 m2, the international exhibition and conference center with the area of 1 hectare and other infrastructure facilities. Comeco Materials – Petroleum Joint Stock Company held a groundbreaking ceremony for the Works start on Comeco building construction of Comeco Building at 549 Dien Bien Phu St, Dist.3, HCMC on 27th December 2008. Nguoi Lao Dong – 27 Dec, 2008 The building is designed with 2 basements used for parking and 20 floors used for office space for rent. On 30th December, Military Telecom corporation - Viettel Telecom received the investment license from Viettel invests in constructing Thua Thien - Hue provincial People's Committee to execute Viettel building project at 11 Ly Thuong Kiet building Street, Hue city on a site of 1224m2 with the total investment of 79 billion VND. VietRees – 02 Jan, 2009 The building includes 11-storeys and 1 basement used for multi-service business such as Viettel, hotels, commercial services, office for rent, working office of Viettel in the Central area. The project is expected to be started in the second quarter of 2009 and put into use in the fourth quarter of 2010. Announced prominent real estate developments during the last 2 weeks* Week 4, December 2008 Week 1, January 2009 Montana apartment building (Tan Phu) Comeco Building (Dist.3) Ho Chi Minh City Saigon – Bason complex (Dist.1) Ngoc Lan apartment block (Dist.7) An Suong ReA building cluster (Dist.12) Quan The Am tourism site (TT-Hue) Cuu Long trade center (Ca Mau) Other Areas Bau Ke ecotourism site (Binh Phuoc) Viettel Building (Hue) Tay Do ecotourism resort (Hau Giang) 5-star The Westin Resort & Spa (Khanh Hoa) Mui Ne resort (Binh Thuan) Complex building (Hue) Paradise sea ecotourism site (TT-Hue) Approved prominent real estate developments in HCM City* November December AP - offices at Binh Quoi (Binh Thanh) Truong Tho apartment building (Thu Duc) Housing, apartment, residential area AP at Phu Thuan Ward (Dist.7) ReA building An Phu – Binh Khanh (Dist.12) AP at Thao Dien Ward (Dist. 2) Cecico 135 apartment building (Thu Duc) Sacomreal Hoa Binh apartment building (Tan Phu) ReA at Linh Xuan Ward (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 A64 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 81.8 26 + Screc Tower 3 81 25.5 + H3 – Hoang Dieu 4 70 26.3 Orient Apartment 4 71.72 19.1 - V- star, Dist.7 Sky Garden , Dist.7 Cantavil, Dist.2 Hung Vuong Plaza 5 121 28.25 * 85m2 – 16 million VND/m2 * 71m2 – 28.1million VND/m2 * 98m2 – 1,875 USD/m2 An Phu 6 95 15 * 110m2 – 15.5 million VND/m2 * 81m2 – 27.1 million VND/m2 * 150m2 – 1,800 USD/m2 Parkview 7 107 30.3 An Hoa 6 7 57 16.3 Thai An 2 12 73 13.5 Hoang Thap BC 97 20 Tan Tao BT 91.11 9 Botanic PN 93 29 + Sacomreal 584 TP 106 14.8 The Montana TP 75 18.1 The Everich, Dist.11 Blooming Park, Dist.2 Phu My, Dist.7 Development land lots – HCMC * 115m2 – 1,650 USD/m2 * 115m2 – 29 million VND/m2 * 82m2 – 18 million VND/m2 Thanh My Loi 2 100 13.2 + * 135m2 – 31million VND/m2 * 117m2 – 20 million VND/m2 Him Lam – Kenh Te 7 200 28.5 Direct contact with the investor1 ADC – Phu My 7 100 16 - Bac Rach Chiec 9 120 7.5 Khang An 9 132 6.5 - Tan Kien BC 100 6.5 Lang Viet Kieu BC 242 10 + Hoang Hai HM 200 9 Tan An Huy NB 120 20 + 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 * 146m2 – 37.6million VND/m2 * 133.5m2 – 2,050 USD/m2 Nam Trung Yen CG 88 18 * 139m2 – 1,900 USD/m2 Nghia Do CG 50 15 25 Lang Ha DD 172 27.4 Thai Thinh DD 68 26.5 Nang Huong TX 100 13.9 + Phap Van HM 86 14.5 Development land lots – Other provinces Rach Bap BD 100 0.85 My Phuoc 3 BD 150 1.45 + New SaiGon, Nha Be The Manor, B.Thanh The Vista, Dist.2 Phuoc Hoa BD 375 1.22 * 74m2 – 1,810 USD/m2 * 101.3m2 – 1,600 USD/m2 * 99m2 – 16.5 million VND/m2 Lan Anh 2 BR-VT 100 1.8 * 113m2 – 2,050 USD/m2 * 121m2 – 17.7 million VND/m2 Wind Hill BR-VT 180 3.9 HUD DNI 450 1.7 Lang chuyen gia Tan Do LA 130 2.2 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 A64 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 A64 Page 8 REAL ESTATE LEGISLATION According to the regulations of the Ministry of Finance, on 1st January 2009, earnings from real estate Cases of property transfers exempt should pay personal income tax, including earnings from transferring land-use right and assets from tax associated with the land (houses, infrastructure and the works associated with land and other assets associated with the land including agricultural, forestry and fishing products); house ownership or house- Tuoi Tre – 29 Dec, 2008 use right; earnings from transferring land-lease right and other earnings confirmed to receive from the real estate transfers. However, the following cases will be exempt from tax: 1. Earnings from transferring the properties between spouses; from birth parents to their offspring; from foster parents to foster children; from spouse’s parents to son/daughter-in-law; from grandparent to grandchild; between the blood brothers and sisters. 2. Earnings from transferring houses, land-use rights and assets associated with the land of individuals in the case that those who transfer have only house and land-use right in Vietnam. 3. Earnings from the value of the land use rights of the individuals that receive the land from the State without any payment or are exempt from the fees on land using as stipulated by law. 4. Earnings from receiving the inheritances or the gifts that are properties between the spouses; birth parents and their offspring; foster parents and foster children; spouse’s parents and sons/daughters-in- law; grandparents to grandchildren; between the blood brothers and sisters. 5. Regarding the households and individuals that directly do agricultural production and convert the agricultural land to streamline their agricultural production, their earnings from the conversion of the agricultural land are exempt from tax. According to the latest decision of the HCMC People's Committee based on the petitions of the Illegal houses: certificates granted Department of Construction, while waiting for the amendments to the relevant legal documents, the only when punishments for offences houses that have been built illegally after 1st July 2004 are only granted the certifications of house executed ownership and land-use rights when the punishments for the construction offences are executed. According to Decision 54, 2007 of Ho Chi Minh People's Committee on granting certifications of house Phap Luat – 01 Jan, 2009 ownership and land-use rights, the houses that are built without licenses after 1st July 2004 will wait for the other regulations. At present, the Department of Construction has continued to complete the treatment direction for these cases. The houses that are built illegally because of self-changing the inside designs as compared to the building permits (although these changes do not affect the floor area and do not violate the planning after 1st July 2004) will not be licensed temporarily. According to real estate business law, Decree 153/2007/ND-CP of the Government and Circular On 1st Jan 2009 properties must be 13/2008/TT-BXD on 21st May 2008 of the Ministry of Construction, on 1st Jan 2009, real estate traded through floors enterprises are obliged to implement the real estate sales, transfers, leases and lease-to-purchase through transaction floors. Kinh Te Do Thi – 01 Jan, 2009 Accordingly, the people can establish transaction floors on their own or choose the real estate transaction floors set up by other organizations established to introduce the properties and implement the property transactions. The trading floor should publicize the information about the properties for sale, transfer and lease (with detailed listings). The minimum time for publicizing the information at the trading floors is 7 days. In addition, the managers of the trading floors must complete the training course on management and also have at least two brokers who have certificates and two employees assessing the properties. According to the Draft, the organizations or individuals that do not trade properties through the floors will be fined from 50 - 60 million VND/ transaction and their business licenses will be revoked if they repeat the offences. In addition, the property transactions of enterprises that are not executed through the floors will not be granted the certifications of ownership. The fine of from 70 to 80 million will be levied on the breaches of the operation principles of broking, assessment and management. The cases of forging the certificates of real estate broking and assessment will be fined the highest level of 90 million and forbidden from practicing within 5 years from the date of punishments. 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 A64 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 A64 Page 10 REAL ESTATE MARKET FORECAST * Note: Information on market forecast is only updated every 4 periods (after one month) by VietRees The transaction situation of the apartments, townhouses and project ground bases in November General tendency of HCMC market continued to decrease more dramatically as compared to the previous months. According to VietRees’s forecast, the real estate prices can continue to decline with the level of 2%- 5 % in December and before Lunar New Year holidays after each month. The prices of the high-grade apartments in November will see the larger decreases as compared to the October and the rate of the successful transactions has still been low, even there are the transaction centers that do not have any successful transaction within 1 week. The buyers are still waiting for the further price decreases. A series of the real estate brokerage agents and centers have stopped operating. The transaction center systems of many companies with the relative scales have been narrowed because they cannot cover their costs and have no customers. According to VietRees, about 40% of the brokerage centers and agents have closed down until the end of November and this number will continue to rise after Lunar New Year holidays. Most of the closed brokerage centers and agents have been located in the districts 2, 9, 7, Nha Be and Binh Chanh. These centers can be the transaction offices of the companies that have many offices and transaction agents scattered in many districts in the city. The remaining centers have not yet closed down but according to the surveys of VietRees, they have only operated perfunctorily and many centers are closed on weekends to reduce the operation costs. The supply of apartments belonging to the average and low segment is quite limited, so the market of Apartment market this segment has also not seen any movement compared to the previous month. The successful apartment transactions do mainly belong to this segment. The investors are beginning to implement the new apartment projects of the average low segment, but in at least 2 years, the new market will have more supplies of the new apartments of this type. According to VietRees, the construction material prices in the past 2 months have declined, which has created favorable conditions for the investors to implement or speed up the construction progress of the projects, especially for this segment. The high-grade apartment prices have slightly decreased in the past month. According to VietRees, the prices have fallen down by approximately 2% as compared with September 2008. The domestic customers of this segment are gradually scaling down. The investors are looking for the new directions aiming at the Vietnamese overseas who are in need of buying houses in Vietnam. However, according to VietRees, there are many difficulties in approaching as well as successfully trading with this group of customers in the short term (1 - 2 years). Project ground base market. The market of ground bases has continued to go down by 4% as compared to October, 2008 according to VietRees, Similarly to October, the successful transactions have been very low and much lower than the apartments whose successful transactions are limited. According VietRees, after Lunar New Year 2009, the real estate market will be the attractive field and bring appealing opportunities to the investors with the plentiful investment and the long-term investment strategies. Therefore, the real estate enterprises that have potential need to build long-term development strategies; work actively in researching and developing, especially, seriously invest in the market researches, customer researches; make the sustainable development steps & avoid scattering/strewing their investment capital in the current difficult situation. CONSTRUCTION MATERIAL MARKET Steel industry has gradually become stable when the steel inventory has decreased and the steel prices Proposing solutions to stabilizing have slightly increased. The Government has directed commercial banks to reschedule the debts of the steel market enterprises (extend the payment time on the loans) and continue to lend them money in order that the Edited by VietRees enterprises in this field can operate again. However, the steel enterprises have just overcome the adverse phase. The construction steel consumption in 2009 is estimated to increase by 5 - 7% as compared with 2008 or it will be 8% if adding welded steel pipes and cool-rolled steel. To create the consumption sources for the steel producers, VSA has said that the State should have the appropriate policies such as lending, foreign currency trading, price adjusting in time for the basic construction works. The standstill of the construction activities (at least in a few more months) along with the slower growth of the economy makes the material market in general has been nearly frozen even though the prices have decreased significantly. STOCK MARKET Right at the opening session, VN-Index has lost 3.13 points to New year’s opening session: two close at 312.49 points with nearly 1 million units matched for bourses gloomy a total value of only over 18.1 billion VND. Entering the consecutive order-matching, the volume of buying orders has Edited by VietRees increased but most of them have ordered at the low prices. As Chart Source: Vietstock a result, VN-Index has lost 2.62 points although it has slightly increased. Ending the opening session of 2009, VN-Index has Up to date: 02 Jan, 2009 officially lost 2.28 points (or 0.72%) to close at 313.34 points. The total trading volume is nearly 5.7 million units worth over 131 billion. In the last week, with 2 upward sessions and 2 downward sessions, VN-Index has added 8.88 points as compared with the week before (from 304.46 up to 313.34 points). In 2008, VN-Index has decreased by nearly 66%. Similarly to HCMC bourse, HASTC-Index also has not avoided losing points in the gloomy transaction situation. It has lost 0.65 points (0.62%) to close at 104.47 points. The total trading volume on Hanoi bourse has only reached over 2.9 million units worth 62.54 billion. After a trading week, this is the fourth consecutive downward session of this bourse. Hanoi bourse has lost 1.15 points as compared to the last week (from 105.62 down to104.47 points). Some investors have shown that the Tet holidays are fast approaching and the investors are less interested in stocks, which is the cause of the gloomy transaction situation on the stock market. On the other hand, the official taxation on the incomes from securities has made many investors depressed and not keen on entering the market. Free register for weekly newsletter: Please send your email to * Sponsor and advestising: T: (08) 3948 5574 - E: