Sai Gon, Vietnam real estate news

Washington Real Estate Trust reports improved results

2008-04-30T10:05:00.000-07:00

Despite the slowing real estate market, Washington Real Estate Trust said funds from operations rose modestly - a penny a share - to 59 cents in the first quarter, within the range expected by analysts.

The Rockville-based real estate investment trust said per share FFO (funds from operations), the main financial measure for REITs, included an 18 cents nonrecurring charge in February for effectively refinancing $60 million in debt at 6.74 percent with a $100 million, two-year loan at a fixed rate of 4.45 percent. The company estimates the new loan will save $5.6 million in the first two years.

Without the charge, WRIT posted FFO of 41 cents a share, compared to 58 cents a year ago. Overall FFO totaled $18.2 million, compared to $24.5 million in the first quarter a year ago.

The company, which owns office, industrial and retail properties in the D.C. area, posted a loss of nearly $1.5 million, or 3 cents a share, compared to earnings of $10.7 million a year ago. It reported revenue from rental income of $70.3 million, up from $59.9 million in the year-ago period.

Skip McKenzie, president and chief executive officer of WRIT, said the company's major exposure with the slowing market is at Dulles Station, a 180,000-square-foot office building it completed in the first quarter on the Dulles Toll Road. The building does not have any tenants yet.

Company officials said they are seeing signs of the slowdown, with longer lease-up periods. Still, the company's core portfolio is 95 percent occupied, and rents grew nearly 3 percent in the first quarter.

WRIT's stock (NYSE: WRE) was up about $1.50 in late afternoon trading.

Source: Bizjournals

More than 12,000 HCMC households reside in decrepit apartments

2008-04-30T10:01:00.000-07:00

Ho Chi Minh City currently has 152 apartment buildings that may pose dangers to their 12,608 inhabitants due to dilapidated conditions, according to a survey by the city's Department of Construction released yesterday.

The ramshackle structures provide a total living space of 618,202 square meters. Among them, 67 buildings are categorized as seriously decayed requiring urgent repair. The department has proposed to the city administration to solicit additional investments for reconstructing and renovating at-risk buildings.
Source: Thanhnien News

The Ministry of Transport is seeking approval from the Prime Minister to use loans from the Asian Development Bank, or ADB, to build three expressways, namely the Hanoi-Lang Son, the Ben Luc-Long Thanh and the Ha Long-Mong Cai, Dau Tu reports. The regional bank has pledged to provide US$33 million to help conduct feasibility studies for the three expressway projects.

Source: Saigon Times

Realty needs standard trading floor for stronger growth

2008-04-28T01:03:00.000-07:00

The realty trading law regulates companies, individuals who trade in real estate must do so via a trading floor where there are regulations and conditions for such transactions, but up till now it has not yet been seen anywhere a genuine trading floor that can be deemed a standard one to meet the spirit of the law.

From a chaotic practice

For a long time, property trading offices have been established and operated in a spontaneous way, mostly serving as venues to provide brokering services. There have been a great deal of transactions there, but they are often conducted in an unprofessional and scattered manner. Most have operated without standard regulations for organization, operation, and especially responsibility towards customers. Many of them even provide wrong information, causing losses to buyers without being held responsible. Those under-the-table transactions have publicly taken place and have gone beyond the control of management agencies.

Meanwhile, for a long time, the State has failed to collect substantial tax amounts that should have been generated from such transactions, since the transaction values stated in contracts are often much lower than the real ones.

Over the past one year, since the realty trading law was issued, many companies have been trying to fumble for a right way for a standard realty trading floor. Even when Decree 153 was issued last October to guide the implementation of the law, companies are still confused as how to apply the law into the real life. Thus, most centers and transaction offices have been operating under their own old way.

Nevertheless, as the deadline January 1,2009 is approaching when all realty transactions must be performed in a legal manner via recognized trading floors, trading companies are still waiting for a circular to implement the decree.

Currently, the Ministry of Construction is making a draft circular on one hand, and is collecting ideas and feedback on the trading floor on the other. The Ministry has approved a pilot standard reality trading floor in HCMC.

The Saigon Cholon Real Estate Investment Joint Stock Company (Inresco) and Phat Hung Real Estate Company have been entrusted to carry out the pilot project. This is seen the first step towards the establishment of a better realty market, and also a chance for relevant agencies to earn more experiences before identifying a model that will be multiplied and applied nationwide.

Ready for opportunities

Inresco and Phat Hung have won the confidence from State agencies to establish a realty trading floor as the two companies have thoroughly prepared a plan on such a trading floor, which has convinced the Ministry of Construction.

"The proactive drafting of a project of standard realty trading floor comes from our need for stable development to compete with other rivals on the market in the long term, especially with the anticipated involvement of foreign competitors," says Dang Van Thanh, Phat Hung's director of marketing.

Meanwhile, Inresco wants to speed up the establishment of a trading floor to sell its products in conformity with the realty trading law. Nguyen Van The, deputy general director of Inresco, says the company has seen its partner Phat Hung as having great potentials owing to its effective sales network and rich experience. The two companies therefore have teamed up for the project, hoping that they would be pioneers in the new realty trading model to have an edge over other competitors at the time when all realty trading and service activities have to circle on its orbit.

Challenges ahead for the pilot project

As planned, the realty trading center will be located at 67 Nguyen Thi Minh Khai Street in District 1. It will includes seven services namely buying and selling, realty transfer, property for rent/brokerage, property auction, consulting, advertising, and management. Traders can access information through networked computers, websites as well as reports and documents with information relating to trading everyday.

However, the major concern for the trading center organizer is the legal aspects relating to the property put up for transaction, as specified by the law.

"The would-be trading floor has a legal entity, a has a right to say no to those transactions that violate regulations as well as is responsible for property trading activities there," says Thanh of Phat Hung. He explains that the trading floor is held accountable for the legalities of properties traded there, before the law as well as before customers.

He also shows great concern over how the center can satisfy both regulations and customers' benefits, given the fact that many property transactions on the local market have been conducted in the absence of transparency, such as the price stated in the contract.

Therefore, although the center is planned to start operation right in the second quarter this year, the organizers admit that there will be many things to be accomplished before as well as after the debut of the trading floor. The two companies therefore plan to invite several more companies to join their trading floor for better strength to deal with the challenge ahead.

Many are pinning high hopes on the realty trading floor, expecting that the standard floor will help improve the transparency on the local real estate market to guarantee tax revenue for the State on one hand and to protect the interests of customers on the other. Last but not least, it will help relevant organizations to catch up with market information, from which they can have a correct judgment before bringing out proper policies for realty development in the future.

Source: Saigon Times

Detailed plans for land use on Phu Quoc ready in Oct.

2008-04-22T21:26:00.001-07:00

The detailed tourism plans for Phu Quoc Island off southern Kien Giang Province will be ready in October, which will then facilitate the development of tourism projects there, a provincial official said.

Dang Cong Huan, head of the provincial Department of Planning and Investment, told the Daily last week that "the job to make detailed schemes of the scale 1/500 for Truong Beach, Sao Beach and Khem Beach is now 50% complete," and these final plans will be brought out in September.

The provincial government has hired consultants to make a land-use scheme for Truong Beach, linking up all projects on the 1,100 hectares of the whole area because several projects had been approved and land allocated to investors before hand. The scheme will serve as guidelines for both State agencies and investors to develop projects in good harmony.

Sao Beach and Khem Beach as a whole will also have a common land-use scheme, and consultants have been hired to make the scheme of the 1/500 scale, Huan said on the sidelines of a conference here on attracting investment into tourism property projects.

"The area (of Sao and Khem beaches) will be reserved for developing five-star standard facilities," he said, adding all the schemes for the island will be completed in October this year.

To ready itself for an anticipated influx of investors into the hospitality industry on the island, the provincial government is also accelerating progress on several key infrastructure projects, he said at the Vietnam Tourism Property Opportunities Conference and Exhibition at HCMC's New World Saigon Hotel.

Provincial authorities are seeking approval from the central Government for permission to choose some more contractors for key infrastructure projects, which include the north-south trunk road and the island's circumference road currently under progress. The province also prefers the investment form of BOT (build-operate-transfer) for a 53km power line linking the province's inland town of Rach Gia to Phu Quoc Island.

"We want all investors to know about the process of developing these key infrastructure projects to facilitate their investment plans there," Huan said.

Duong To International Airport as the most important infrastructure project there is also seeing smooth progress, and site clearance is 80% complete now. Construction will start work on this airport in September for opening in 2011, with total investment of VND4 trillion. The Southern province has also planned ways for receiving a big number of tourists to Phu Quoc now that the international airport is still under construction, one of which being to increase air flight frequency at daytime. More tourist boats will also be put into services in the coming time to carry passengers from the mainland, he said.

The central Government has also agreed in principle to the establishment of a joint venture air service company to fly tourists there," he revealed.

Source: Saigon Times

Phu Quoc officials oppose forest lease plan

2008-04-22T21:24:00.000-07:00

Officials of Phu Quoc Island, a favorite tourist destination in southern Vietnam, are protesting the Kien Giang Province administration’s plan to use over 8,700 hectares of the island’s forests for ecotourism projects.

The plan, which envisages allocating roughly a quarter forest areas of Phu Quoc Island to property developers by 2010 to invest in tourism activities under lease contracts, was delivered to Phu Quoc District authorities last week and met strong opposition.

Under the plan, investors will be allowed to use 5 percent of the leased forest area to build tourism facilities while the remaining territories are only permitted to serve as landscapes.

More than 100 businesses have thus far registered to develop the designated areas according to the plan.

Pham Phu Hai, former vice chief of Phu Quoc District’s Communist Party Unit said he could not understand why Kien Giang provincial administration had not previously announced such a big project to Phu Quoc authorities before cooperating with investors.

Hai said the forest area reserved for construction of tourism facilities would face high risks of fire, deforestation, and pollution.

Head of the district’s Inspection Division Pham Thi Kim Dung said apportioning Phu Quoc’s forests for tourism development would go against the central government’s scheme until 2010 to develop the island.

According to the decision issued in 2004, the government required an increase in planted forest areas from some 4,300 hectares to between 6,500 hectares and 7,000 hectares by 2010 – to achieve a total of 38,000-39,000 hectares of forests on the island.

“While the forest areas have yet to increase, more than 400 hectares would be earmarked for tourism constructions,” Dung said. “It’s a violation of the government’s mandate.”

Other officials suggested the provincial People’s Committee suspend the project altogether.

Colonel Nguyen Van Luan, the former head of the district’s Veteran Society, meanwhile, proposed authorities select several investors to invest on a trial basis first.

Kien Giang is a southern province in the Mekong Delta region, home to many famous coastal districts like Phu Quoc and Ha Tien.

Source: Thanhnien News

Danang faces glut of homes

2008-04-22T21:21:00.000-07:00

Concerns have been raised over the possible sales glut of homes in Danang as developers flock to the central city.

Although local authorities and developers claim the future is bright for real estate development in the city, which is the economic spearhead of the central Vietnam, some industry insiders point out demand remains modest while the market is in danger of being oversupplied.

“With so many projects planned for Danang it is a big question of how to sell,” said Nguyen Quang Ninh, business development director of Indochina Land, the real estate division of Indochina Capital.

Ninh is concerned over developers building a dozen of residential, hotel, office and new townships in Danang at a time when sales of other properties are slow.

VinaCapital has broken ground for construction of a 9-hectare estate by the Han River, which will be completed in the next 10 years, featuring high-end apartments, hotels, offices, shopping mall and international school. The development cost is around $325 million.

Korean firm Daewon is building two estates, including the $250 million Da Phuoc International City and $30 million Cantavil apartment complex.

Local firms such as Vien Dong Land and Dong A Real Estate are building two large complexes downtown with investment capital of $180 million and $60 million respectively. Vu Chau Long Real Estate Joint Stock Company recently broke ground for construction of two properties costing some $235 million.

Resorts under construction along the coast, include villas and apartments incorporated in resort such as Hyatt Regency, Raffles, Son Tra Resort and Spa and the second phase of Furama.

Ninh said it would not be easy for these properties to sell as local demand for hotels, offices and apartments was still small, which was reflected through the sales of 95 apartments at the Indochina Riverside Towers.

Sales of these condominiums have been slow over the last two years and the developers were only able to sell out all recently when the market heated up late last year and early last year. Only 20 per cent of customers are locals.

Indochina Riverside Towers is the first condominium in Danang. The other, Danang Plaza at No.6 Nguyen Du street, is still under construction.

Ninh said as demand was weak, it would be challenging for developers to pre-sell their properties and as a result, construction might be put on ice in case developers were not financially strong enough. There is also a lack of flights to bring tourists to Danang and local hoteliers are asking for more flights from South Korea and Hong Kong.

“It will be very difficult for us to sell because demand is too weak,” said a developer, who is building a new township in the city. “However, we can not abandon the project because we have spent quite a lot on compensation and land clearance.”

However, some others remain bullish over the future of Danang. Dam Quang Tuan, chairman of Investment and Construction Joint Stock Company 579 said Danang had potential to become a service and tourist hub of the Southeast Asia.

“There is no adequate information to have an accurate assessment of local real estate market. But, I am confident Danang can be developed in the way Singapore has done,” said Tuan.

Source: VIR

Housing gloom 'worst in 30 years'

2008-04-15T08:56:00.000-07:00

Confidence in the UK housing market fell in March to its lowest point in 30 years, according to a closely watched survey of property surveyors.

The Royal Institution of Chartered Surveyors' (Rics) said that 78.5% more surveyors reported a fall than a rise in house prices in March. This was the gloomiest reading since Rics began the survey in 1978.

The results come after leading mortgage lenders offered similarly downbeat views on property prices. Rics said the next six months would be crucial for homeowners and would-be buyers in the UK.

Historical low

The Rics house price balance dropped for the eighth consecutive month. It exceeded the previously lowest reading in June 1990.

Jeremy Leaf, Rics spokesman, said the gloom was the result of the credit crunch and its effect in stopping mortgage providers lending to each other.

"Sentiment is at a very low ebb and will continue to remain depressed while the economy suffers from this unique liquidity blight," he said.

But he added that a significant crash in prices remained unlikely and buyers with access to large deposits had the chance to get their hands on property they could not previously aspire to.

Following the trend

The survey follows March reports from the UK's two biggest mortgage lenders which reported month-on-month falls in house prices and predictions of a fall throughout 2008.
The Halifax last week reported a 2.5% fall in prices in March, the biggest monthly decline since September 1992 and the slowest annual growth for 12 years.

Prime Minister Gordon Brown and Chancellor Alistair Darling are meeting banks and mortgage lenders to discuss liquidity - widely regarded as the key factor affecting mortgage availability.

This has meant lenders are keen only to attract low-risk customers who can offer a significant deposit.

Some 49% more surveyors reported a fall than a rise in new buyer enquiries, up from 39% in January.

"Many would-be buyers are either struggling to raise the necessary finance to precipitate a move or are exercising caution in the light of current economic uncertainty," Rics said.

Falls in price

The falls in prices are particularly marked for flats and maisonettes and in certain parts of the country.

The sharpest falls were in the East Midlands and East Anglia, while slower falls were recorded in north-west England, Wales and London.

Scotland continued to buck the trend, with house prices reported to be rising slightly. The stock of unsold property on surveyors' books declined by 1.3% compared with February, but up 50% over the year.

Source: BBC News

Boom in Moscow’s commercial real estate

2008-04-15T08:55:00.000-07:00

Currently commercial real estate in Moscow - including offices, trade and warehouses - offer the highest yields in Europe. At the same time Russia’s regions are also becoming attractive for investors with long-term strategies.

According to Knight Frank research, despite the challenges caused by the global credit crisis, investor interest will only grow.

“The German funds, English, Irish investors - all of the people we would see in the emerging markets. I've just come from Dubai. There's a lot of interest in commercial space there, but because it's all sold strata title it's less attractive for the big investors. What we're seeing here is big funds interested in making big purchases,” said Jeremy Oates, Managing Director of Knight Frank Russia and CIS.

However, Knight Frank says rents are growing faster in Moscow than anywhere else, bar London. Consequently, rapid growth brings its own risks.

Russia's regions serve as a foil to the capital - lacking infrastructure but offering more potential.

According to Marina Usenko, Senior Vice President of Jones Lang LaSalle, in the regions it’s possible to start in almost any sphere of commercial real estate, “be it offices, retail, or logistics”.

Also, experts say investors are attracted by comfortable conditions offered by local governments.

Still, for all the attraction, the regions have fewer tenants and that means Moscow is likely to remain Russia's number one market in commercial real estate.

Source: Russia Today

NewNational and regional housing markets soften, New Zealand

2008-04-15T08:53:00.000-07:00

Two sets of real estate figures released last week show the property market continues to soften.

Although average house sale prices in Marlborough rose last month, both the growth rate and the number of sales slowed.

Real Estate Institute of New Zealand (REINZ) figures released on Friday showed that the Marlborough region's median fell from $350,000 in February to $311,250 in March. In March last year, the median was $325,000.

The region's figures bucked the national trend of noticeable drops in under-$400,000 properties, with sales dominated by properties at the lower end of the market.

The REINZ figures showed the national median price up from $337,500 in February to $349,000 in March, with an annual increase of 1.6 percent from the $343,500 in March 2007.

Nationally, house sales plummeted in March to 5129, compared with 6356 in February, and more than double that figure of 10,989 in March last year.

The REINZ figures for the Marlborough region showed just 84 houses sold in March, down from a figure of 99 in February.

In March last year house sales numbered 142.

Meanwhile, despite an increase in the average sale price in the region, Quotable Value (QV) figures released today show Marlborough's price growth percentages took a slide to 4.8 percent in March, down from 6.7 percent in February.

Nationally, residential property annual growth percentages also dropped to 6.5 percent in March, down from 7.7 percent in February.

The average Marlborough region sale price increased last month by just over one percent, from $363,869 in February to $368,707.

Nationally, the average sale price for homes fell to $388,894 last month from $393,240 in February, Quotable Value figures show.

"The market is continuing to soften, with more listings and fewer buyers leading to reduced demand," said QV spokesman Blue Hancock.

"While some properties or localities are selling below previous expectations, other areas continue to hold up well," he added.

Market sentiment was negative and likely to remain so through the winter months, Mr Hancock said.

REINZ national president Murray Cleland said that while confidence, especially in the bottom end of the market, appeared to have fallen, the earliest Easter in many years also had a part in the drop in sales.

Of the 12 regions covered, median prices fell in seven, rose in four and were unchanged in one, Mr Cleland said.

The unusual factors in March could not hide the fact that in many parts of the country prices were rather weaker.

The likelihood that a growing number of properties would come on the market either through bank-forced sales, or through the collapse of property investment schemes, would put more pressure on the market, Mr Cleland said.

He added that he felt median prices would be unpredictable because of the low sales.

Source: Marlborough Express

Real estate prices rise up to 90% in Riyad, Saudi Arabia

2008-04-11T21:14:00.001-07:00

Real estate prices in Riyadh have increased by 40 to 90 percent in recent months, but analysts said property prices in the Kingdom were still the lowest compared to neighboring GCC countries.

The analysts attributed the increase in prices to growing demand for real estate following repatriation of Saudi funds from abroad. Many Saudis favor real estate being a secure investment.

The price for a square-meter of land in the capital ranges between SR400 and SR4,000 while building costs range between SR1,000 and SR2,500 per square meter, Al-Eqtisadiah Arabic daily said. “Many Saudis have shown interest in real estate lately following recurrent fluctuations in the Saudi bourse,” one analyst said.

Suleiman Al-Amri, chairman of a real estate company, said he believed that real estate prices in the Kingdom were much lower compared to neighboring countries. “This indicates that real estate prices in the Kingdom are still normal,” he added.

Al-Amri spoke about growing prospects for investment in real estate in Riyadh as 70 percent of Saudis living in the city still do not own a house. “This situation will increase demand for real estate for building houses,” he added.

He also called for suitable solutions for housing problems in the country. “Rules and regulations should support investment in the sector,” he added.

Al-Amri said prices of real estate in some areas of Riyadh have increased by 90 percent. “This is really frightening.”

He stressed the need for more companies to build housing units. “Many people are still seeking villas and flats instead of purchasing land,” he pointed out.

Abdul Aziz Al-Jaad, a member of the real estate committee at the Riyadh Chamber of Commerce and Industry, also agreed that real estate prices in the city were rising gradually as a result of demand.

“Real estate owners are now selling land to developers rather than individuals,” he said.

Al-Jaad said the tremendous hike in prices would discourage many Saudis from purchasing land. “They will wait until the prices come down,” he added.

Ali Al-Fowzan, director general of a real estate office, said there is big demand for real estate to construct houses, offices and other projects. “The increase in real estate prices could be found all over the Kingdom, not in Riyadh alone,” he said and cited increasing liquidity as one of the major reasons for price hikes. The hike in real estate prices has also reflected in rents for offices in Riyadh and other parts of the country.

Many small businesses have been closed down as a result of a 35 percent increase in rents as their owners thought it was better to close than suffering losses.

Many traders have protested the high increase in rents but Khaled Al-Salman, a real estate developer in Jeddah, defended the move, saying construction cost had gone up 25 percent. He expected more demand for showrooms and office rooms.

Saad Al-Abdullatif, owner of a computer repair shop in Dammam, said he decided to close his present shop when the real estate owner increased rents from SR25,000 to SR32,000. “I am now looking for another showroom at a lesser rent.”

Arab News

U.S. housing price declines may reach 20% by 2009, PMI says

2008-04-11T21:09:00.000-07:00

U.S. housing price declines will probably double to a national average of 20 percent by next year, according to a report from PMI Group Inc., the second-largest mortgage insurer.

The drop from the mid-2006 peak won't be evenly distributed, according to PMI's market risk index, published today by the Walnut Creek, California-based company in its quarterly real estate trends report. Metropolitan areas where home prices are most likely to be lower are all in California, Florida, Arizona and Nevada.

"The decline in house prices is only about one-third to one-half over, due primarily to the magnitude of the supply/demand imbalance," David Berson, PMI's chief economist, wrote in the report. "That assumes that the current economic downturn is both short and modest," said Berson, who previously was chief economist at Fannie Mae, the world's largest mortgage finance company.

The price decline from 2006 is measured by the S&P/Case- Shiller home-price index which covers 20 metropolitan areas. The supply of single-family homes for sale is the highest in more than 20 years, Berson said.

There's a 93 percent likelihood of lower prices in the Riverside-San Bernardino, California area, followed by Las Vegas, at 91 percent, according to PMI's model. Orlando and Fort Lauderdale, Florida and Phoenix, Arizona round out the top five.

Metropolitan areas where values are most likely to hold up are the central and southern U.S. They include Dallas, Houston and Fort Worth, in Texas; Cleveland and Columbus, Ohio; and Memphis, Tennessee and Charlotte, North Carolina, with less than a 1 percent chance of lower prices in two years.

PMI insures lenders against borrowers who fail to repay their loans.

Bloomberg

New Zealand house sales drop 53% to a seven-year low

2008-04-11T21:06:00.000-07:00

New Zealand house sales slumped to a seven-year low in March, adding to signs record-high interest rates are cooling the property market and will slow economic growth.

The number of homes sold dropped 53 percent to 5,129 last month from 10,989 a year earlier, according to a report today from the Real Estate Institute of New Zealand Inc. e-mailed to Bloomberg News. Sales were the lowest since January 2001.

Finance Minister Michael Cullen said he couldn't rule out a recession this year because of weakness in the property market, a drought and turmoil on global financial markets. Falling consumer confidence and the weak housing market will prompt Reserve Bank of New Zealand Governor Alan Bollard to cut the benchmark interest rate at 8.25 percent this year, according to 7 of 12 economists surveyed by Bloomberg News.

"We see a risk of house prices dropping by more than the Reserve Bank currently forecasts," said Nick Tuffley, chief economist at ASB Bank Ltd. in Auckland. "There is a glut of supply and the mechanisms to reduce that are weaker prices or sellers withdrawing from the market."

The central bank forecast last month that prices will fall 3.9 percent in the year ending Sept. 30, the first decline in since 2000. Bollard said a "sharp slowdown" in the housing market was spilling over into consumer spending.

Economic growth may slow to 1.7 percent this year from 3.1 percent in 2007, according to a median forecast of 12 economists surveyed by Bloomberg News.

Consumer Confidence

Consumer confidence fell to a 10-year low in the first quarter, according to survey by Westpac Banking Corp. and McDermott Miller Ltd.

"There is no doubt confidence has taken a knock," Murray Cleland, national president of the Real Estate Institute, said in a statement. "The balance of probability is that the property market will weaken in coming months."

A four-day Easter vacation in March may have contributed to the decline in sales, he said.

The median house price rose for the first time in four months in March because sales volumes of high-priced homes didn't drop as much as cheaper houses, Cleland said.

The median price rose to NZ$349,000 ($278,188) from NZ$337,500 in February. Prices gained 1.6 percent from a year earlier.

The median time it took to sell a house was 40 days, compared with 27 days a year earlier and 50 days in February.

Bloomberg

Sacombank set profit to rise 25 percent

2008-04-05T20:37:00.000-07:00

Saigon Thuong Tin Commercial Bank, Vietnam’s second-biggest bank by market value, said it expects 2008 pretax profit to rise 25 percent, which analysts say may be boosted by its real estate and stock-trading businesses.

Pretax profit is expected to rise to VND2 trillion (US$124 million) in 2008 from 1.6 trillion last year, the bank, known as Sacombank, said Wednesday.

The company also expects total assets to reach VND93 trillion this year from VND63.5 trillion last year.

Thanhniennews

Property fair to showcase new tourism investment opportunities

2008-04-05T20:35:00.000-07:00

Foreign investors will be briefed on the country’s tourism real estate development potential in an exhibition to be held in Ho Chi Minh City from April 17-18 at the New World Hotel.

Phuquocland East Asia Corporation, the organizer of the Vietnam Tourism Property Opportunities Conference and Exhibition, or VnTPO-2008, hopes that the event will spark investors’ interest in an increasingly attractive area: developing tourism sites.

The exhibition, entitled “Unveil the Hidden Charm,” aims to give foreign investors a broad overview of the country’s tourism landscape ranging from beaches and hotels to investment laws and potential projects.

It will feature seminars and conferences with keynote speeches by Minister of Culture, Sport and Tourism Hoang Tuan Anh and the Vietnam Chamber of Commerce and Industry’s Chairman Vu Tien Loc.

Around 300 projects to build resorts, hotels, golf courses, theme parks, and residential zones will be showcased at the fair.

The event is expected to gather over 500 foreign investors and experts in real estate, tourism and other sectors, high-ranking government officials as well as representatives from 16 provinces with tourism potential.

Experts say Vietnam is becoming an attractive destination for foreign tourists and tourism investors alike with an increasing demand for luxury villas and condos on beaches.

Last year, the country welcomed 4.2 million foreign tourists, up from the figure of 3.6 million in the year before.

Thanhniennews

HCMC auction bypass draws public ire

2008-03-24T09:43:00.001-07:00

Ho Chi Minh City’s decision to give a hotel developer a parcel of prime downtown property has triggered a public outcry, with critics saying the land could fetch over $173 million if it went to auction.

The People’s Committee, in a dispatch signed by Deputy Chairman Nguyen Huu Tin last month, granted use of nearly 5,000 square meters of land in the center of the city to Saigon Hon Ngoc Vien Dong Company.

Many public figures, however, called the decision “unfair to investors” and said an auction for the “golden” property could have earned significant amounts of cash for the city’s coffers.

The decision flies in the face of the committee chairman’s directive last year that the land would go to auction.

The administration faced similar criticism last year when it granted another prime land lot to Vincom Shareholding Company, also without holding an auction.

Golden land

According to local property price assessment companies, the lot on Le Duan Boulevard, a prime District 1 street with the Independence Palace at one end and the city zoo at the other, has an estimated market price of VND2.75 trillion ($173.3 million).

It is now managed by the HCMC Housing Business Management Company, a state-owned company under the People’s Committee’s Construction Department, which has leased it to four other companies.

In a meeting in November, People’s Committee Chairman Le Hoang Quan announced the land would be used for a five-star hotel project and asked local agencies to prepare for an auction.

Earlier this year, the Ministry of Industry and Trade, which holds majority stakes in the four companies which are leasing the land, asked the city administration to grant them the land to develop the project.

The reply, also signed by Deputy Chairman Tin late last month, said the property was subject to an auction under current regulations on public assets.

Yet the Saigon Hon Ngoc Vien Dong Company, of which a founding shareholder is the HCMC Housing Business Management Company, won the right to use the land without any explanation from the administration.

Unworthy choice

Those who have protested the decision said the city’s auction of a less attractive land lot in Binh Thanh District last year had injected about $56.5 million into the city’s consolidated revenue.

The Le Duan lot could earn up to five times that amount, they argued.

Forgoing an auction meant the city wasted an opportunity to select the best developer for the precious property, they said.

Le Hieu Dang, vice chairman of the local committee of Fatherland Front, an umbrella organization for social and political groups in Vietnam, said he supported an auction of the land.

“The golden land must fetch gold for the city,” Dang said.

Dang Van Khoa, a member of the local legislative People’s Council, said the land’s “excellent location” deserved an investor of high caliber to make it “an architectural focus” for the city center.

“This property is not an asset of the HCMC Housing Business Management Company,” he said.

“It is an asset of the city, which assigns the company to manage it. The company therefore is ineligible to any preferential treatment.”

A director of a local real estate company, who spoke on condition of anonymity, said the city should hold an auction for all prime land lots, including the Le Duan site.

“If the bidding criteria are clear and the judgment is transparent and fair, even those bidders who lose will feel happy,” he said.

(Thanhniennews)

Ministry considers forcing developers to build affordable housing

2008-03-19T07:27:00.000-07:00

The Construction Ministry has released a draft plan for the property market, designed to increase housing supply, fight speculation and make the market more transparent.

Housing projects on more than 10 hectares must set aside a portion of the land for affordable housing, under a draft proposal released by the central government’s Construction Ministry.

The ministry is seeking feedback from the real estate sector on its draft blueprint, which recommends new taxes and selling mechanisms.

Once finalized, the real estate plan will be submitted to Prime Minister Nguyen Tan Dung for approval.

A dire shortage of housing, fueled by the government’s weak management and speculation, has inflated property prices in the country’s major cities, especially within the past year.

In these cities, Western-style suburbs and apartment blocks are sprouting up, driven by more than 8 percent annual economic growth that has given investors ready cash to spend.

Realtors said the pace was so fierce that prices had zoomed off the charts – no mean feat in a country where per-capita gross domestic product (GDP) is less than US$900.

In just one year, some Ho Chi Minh City neighborhoods have seen apartment prices jump as much as 100 percent, investors said, adding that more than 80 percent of those investing in property were paying in cash.

The market has been relatively stagnant recently after the government’s tightened monetary policy and announcement of a higher property tax plan.

But even though sales have slowed, property prices have hardly come down.

The Construction Ministry, in its proposals, is seeking to increase the housing supply by forcing property developers to build more affordable homes.

The ministry also plans to streamline licensing procedures for housing projects.

It supports the government’s legislation to limit speculation by imposing higher taxes on people who have unused land and housing.

Obligatory affordable housing areas

Under the ministry’s proposals, housing project developers building on 10 hectares or more would have to use 20 percent of the land for affordable housing for rent or sale.

Provinces and cities, meanwhile, would have to reserve 10 percent of their urban development land for affordable housing.

They would also have to ensure that medium-sized apartments – those with areas ranging from 70-90 square meters – made up half the total number of apartments of any apartment building project.

The percentage for large-sized apartments – with areas larger than 120 square meters – would be 20 percent.

The remaining 30 percent could be apartments with areas of 45-60 square meters.

The ministry proposed that concerned government agencies improve licensing formalities to accelerate the supply of housing to the market.

The government could study Japanese and South Korean models of social housing development corporations in implementing its social housing program, the draft also suggested.

Tightened grip on speculators

The government’s credit and tax policy had to support real estate developers but constrain speculators, the ministry said.

The ministry proposed a progressive land tax scheme in which owners had to pay increasingly higher rates on excessive or unproductive land.

However, if the properties were part of a business’ assets for which their owners had paid corporate tax or income tax, they wouldn’t be subjected to the progressive tax, the ministry said.

The ministry said the real estate transaction tax should be reduced to 1 percent from current 4 percent of the trade value.

This tax could also be included in the personal income tax or corporate income tax, it suggested.

This would encourage people to legalize their transactions instead of dealing under the table to evade the tax.

The ministry, on the other hand, suggested that property owners pay higher tax if they sold properties within two years after buying them.

The proposed tax rate was about 25-28 percent of the disparity between the declared buying and selling price.

Real estate exchanges

Under the ministry’s plan, all real-estate transactions would be conducted at exchanges to improve transparency.

Trades of properties which did not have appropriate certificates would also be done at the exchanges, it said.

This provision is, in fact, not included in the current Real Estate Trade Law.

Le Cao Tuan, the Housing Administration’s Real Estate Department director, said it should be added to prevent “cases in which someone attempts to sell a property which is not his or hers.”

“We would explain this [to the government] so that it will exist in the [approved] circular.”

The real estate exchanges would report to the local construction department about its transactions every month, the ministry said.

Housing Management head Nguyen Manh Ha told Thanh Nien that exchanges caught violating the regulations would be fined.

Real estate businesses attending the conference, held to release the ministry’s proposals, called on policy makers to ensure stability for the market.

They proposed the government delay its plan to levy higher property taxes, enact regulations concerning overseas Vietnamese’s and foreigners’ home purchase in Vietnam, and listen to businesses in making real estate policies.

(Thanhniennews)

Spanish architects seek partnerships in Vietnam

2008-03-15T20:55:00.000-07:00

A group of Spanish architects arrived in Vietnam Wednesday to observe the country’s economic boom first hand and examine its effect on the design and construction industry.

The main objective of their three-day visit is to introduce Spanish companies from all fields of architecture to the Vietnamese market in order to establish partnerships and carry out joint projects, an official from the Spanish Embassy in Vietnam said.

Representatives from the Spanish architecture firms which specialize in urban planning and the construction of office and apartment buildings and tourism facilities like hotels, resorts, amusement parks and golf courses, visited some developing areas and held meetings with representatives of the Urban Planning Department and the Vietnam Architects’ Association.

The architects will meet local businesses in Ho Chi Minh City today and seek out prospective partners in Vietnam.

A face-to-face meeting will take place between Spain’s Economic and Commercial Office and the Spanish Institute for Foreign Trade Services Promotion Department and HCMC’s Investment and Trade Promotion Center.

The official from the embassy said the Spaniards will tour HCMC and examine the master plans for the city in a visit to the Urban Planning Department.

This trip is a follow-up to a seminar entitled “Opportunities in the architectural sector in Vietnam” held in Barcelona and Madrid in November last year.

This seminar, organized by the Spanish Institute for Foreign Trade, attracted around 70 Spanish architects.

After the seminar, several experts analyzed the real estate and urban architecture in Vietnam, a sector that is growing steadily and requires a greater number of professionals.

This comprehensive trip to Vietnam has been organized following great interest sparked at the seminars, the official said.

(Thanhniennews)

Property investment increasingly difficult

2008-03-13T07:27:00.000-07:00

With real estate prices rising and banks toughening up on property loans, realty investors have a lot to be nervous about.

As tightened monetary policies have made markets volatile, those looking to profit on property are finding banks increasingly uncooperative.

Director of Saigon-Gia Dinh real estate company Nguyen Phung Thieu said his company had been re-considering a low-income housing project plan since banks began tightening credit on real estate loans.

Low-income-bracket residents might be the most affected by the distance banks are putting between themselves and the risky property market, Thieu said at a recent conference between the Ho Chi Minh City Real Estate Association and local authorities.

For the past week, commercial banks across the city have been reducing real estate loans, rejecting more applications on suspicion of speculation and terminating expiring loans in response to the overheating of the property market.

Conference attendees agreed that a major factor driving up real estate prices for the past six months was an increasing demand for property from the wealthy.

Many rich people had used their spare money, or withdrawn investment from the stock market, to invest in real estate, according to experts at the conference.

They said that whether or not banks went tough on property loans, the wealthy group would not be affected.

But for poor people in need of housing and for not-so-rich investors, including many real estate companies who need loans to finance projects, experts called the tightened policies “a nightmare.”

The poor might find housing too expensive and investors could be discouraged from carrying out new projects.

Investors shaken

In a separate conference, Chairman of ACB Capital Management Company Trinh Kim Quang predicted that banks themselves were scrambling for cash due to the central bank’s tightening of credit measures to curb inflation.

Quang said this would make it even more difficult for real estate investors to obtain bank money.

Commercial banks are required to increase their cash reserves by 1 percent while buying trillions of dong in treasury bills to be sold by the central bank next month.

The increase in compulsory cash reserves had put pressure on deposit interest rates, which in turn was pushing up interest rates on different types of bank loans, making it all the more difficult for investors in need of bank loans, said Quang.

But experts said what they feared most was the market “freeze” that could occur if real estate businesses – 70 percent of which rely on bank loans to fund projects – could not carry out their projects due to a lack of affordable loans.

Some insiders have predicted that many projects would be shelved as banks may terminate loans or reconsider interest rates unexpectedly.

Quang said the tight credit on loans was partly aimed to correct the consequences of previous lending.

Banks had previously vied with each other to attract real estate investors by offering low interest rates and easy requirements, which led to a dramatic increase in property lending, Quang said.

Others, however, expected banks to be on friendly terms with property investors sooner rather than later.

“Real estate has always been an attractive market for banks,” Chairman of the Mekong-Delta

Housing Development Bank Huynh Nam Dung said at the same conference.

Dung said that practical and promising projects and people with real housing needs and the ability to pay back loans were still able to secure loans from banks.

Property shortage

Experts say that low supply is the root cause of rising real estate prices.

Banks have been advised to encourage lending to projects designed to relieve the shortage.

But if tight credit policies are applied indiscriminately to all property items, the shortage might be aggravated and prices may soar even higher.

Local real estate firms said the property market had appeared to cool a bit this past week with more sellers than buyers.

Some attribute the quietude to bank policies.

Others say that public anticipation of a tax targeting excessive or unproductive land to be drafted this year is having a greater impact.

Property prices have been lowered in some areas, but experts say the decrease in prices is insignificant.

To bring down prices, supply needs to be increased to meet the rising demand from customers, many of whom are enjoying better incomes and thus have more money to invest in real estate.

According to President of Thu Duc Housing Development Company Le Chi Hieu, one way to increase supply is for the government to simplify procedures to ensure swift execution of real estate projects.

Head of Dat Lanh real estate company Nguyen Van Duc said it normally took 3 to 5 years for investors to secure necessary permits to start building their projects.

(Thanhniennews)

Property price cuts: don’t believe the hype

2008-03-13T07:25:00.000-07:00

Real estate developers claim they are slashing prices, but in reality the cuts do little to ease the burn of the overheated market on buyers’ wallets.

Man came back to Ho Chi Minh City last month, hoping to settle down after living in the US for 20 years.

Confident with about US$600,000 to spend, he was attracted by property in Saigon South’s District 7, just three kilometers away from downtown.

“240-square-meter land lot for building a villa,” the ad said. “Good price.”

The good price turned out to be an uncompromising VND96 million ($6,000) per square meter, too steep for Man.

The lot’s owner said the price had been VND100 million last month.

Still hoping for some property in the prime area, Man downgraded his search from a villa to a smaller house only to face a price tag of VND6.5 billion ($409,578) for 100 square meters.

“Even if I could afford the land, I wouldn’t have enough money to build a house,” Man said.

“Why’d they tell me property prices are down?” he asked, referring to local media reports of a cooling real estate market.

Though land and housing prices did go down this year after banks tightened loans to curb inflation and the government disclosed a plan to levy heavy taxes on excessive or unused properties, the subsequent price cuts have not been significant and land prices are still through the roof.

As fears that a recession on the real estate market is near are not unfounded, many have jumped to sell and few have jumped to buy.

Property firms’ price reductions, usually between VND1 million–5 million ($63-315) per square meter, actually do little to cut the overheated prices.

Tran Van Binh, a salesman of Pho Moi real estate company, said some landowners in Binh Chanh District had cut prices by VND4 million ($252) per square meter within a week.

“Many who have to pay the banks soon are selling land at lower prices,” Binh told Thanh Nien.

And big investors are still buying.

“They think that the reduction is just short-term and prices will go up again,” Binh said.

Their confidence is not baseless as the country’s business hub is in dire need of housing for its booming population of 8 million.

Even those who sell are not losers, Binh said.

Prices have already reached so high a level that sellers’ discounts barely threaten profits at all.

“People love to hear ‘price down’ so we please them by cutting a few million [dong],” a speculator who owns four pieces of land in District 9 told Thanh Nien.

His land was inflated four times what he had paid, to VND20 million ($1,260) per square meter last year.

Now he is selling the property for VND16.5 million ($1,039) per square meter.

“A bit less profit, but we’ll never lose,” he said.

But small buyers like Man are left in the lurch.

Man turned his hunt to Binh Thanh District in his search for a house but was no luckier.

A 124 square-meter villa in the riverside Saigon Pearl residential area would cost him an intimidating VND25 billion ($1.6 million).

He gave up looking after a fruitless month.

(Thanhniennews)

Seminar told of obstacles to Vietnam’s real estate sector

2008-03-13T07:22:00.000-07:00

The “promising” growth of Vietnam’s property market could be undermined by poor planning decisions and insufficient infrastructure, an international real estate seminar in Ho Chi Minh City heard Saturday.

The seminar, held by the International Real Estate Federation and the Ho Chi Minh City Real Estate Association, was told Vietnam needed to pay close attention to traffic and transportation, issues currently causing headaches for the government.

Participants at the seminar shared their experiences in planning and developing urban areas, shopping centers and other real estate projects.

They also discussed international valuation standards and the latest property marketing methods.

(Thanhniennews)

Real estate listings

2008-03-04T08:50:00.000-08:00

Bernal and Burt - Real Estate Agents
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Villas Rentals St Tropez - Real Estate Agents
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The Landings Real Estate - Real Estate Agents
Online listings of all homes and lots for sale on The Landings on Skidaway Island, located in Savannah, Georgia.

Blesch and Associates - Real Estate Agents
Residential and commercial Realtors serving the Inland Empire of California.

SOLDbyME.com - Real Estate Agents
Flat Fee MLS allows sellers to sell For Sale by Owner on the St. Louis MLS for flat fee instead of paying the standard MLS commission.

Tierra Antigua Realty - Real Estate Agents
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Johnson Realty - Real Estate Agents
St. Louis Realtors offering a hybrid approach to selling homes that combines the best of discount brokerage, full commission agents and for sale by owner.

Alexandria Real Estate - Real Estate Agents
Comprehensive real estate website for Alexandria Virginia. Full MLS search, including condominiums, townhouses and single family homes. Free home evaluation service.

Homefinders.com - Real Estate Agents
A Guide for home buyers in Maryland and Northern Virginia; maps, search listings, financing. Experienced buyer's agents ready to help.

Lake Arrowhead Georgia - Real Estate Agents
Lake Arrowhead Georgia is located on 8,200 acres of real estate. Find, buy or build your new home in Lake Arrowhead.

Commercial Real Estate - Real Estate Agents
Commercial real estate brokers listings for sale and lease. National and international commercial property services for buyers, sellers, owners and tenants. National Association Of Realtors.

The Earl of Real Estate - Northern Virginia Real Estate
Search all Northern Virginia homes for sale & Northern Virginia Condos from the Multiple listing system, Northern Virginia real estate.

House - Houston Real Estate Agents
Listings of Houston properties for sale or rent by owner, agent, or property manager.

Luxury El Dorado Hills Real Estate
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Savannah Real Estate Marketplace
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HomeSniffer.com
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Cash The House
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Shore Realty of the Outer Banks - Real Estate Agents
Real estate sales on the Outer Banks of North Carolina from Corolla to Nags Head and Hatteras Island and all 80 miles in between.

Coldwell Banker - Real Estate Agents
Real estate company offers custom personal and commercial real estate property search.

ERA - Real Estate Agents
National real estate franchise offers listings throughout the United States.

Keller Williams - Real Estate Agents
Realtor offering nationwide property listings througout the United States.

Linn Real Estate - Real Estate Agents
Real estate agent offering property listings of all types within the Pierre Area.

Prudential Real Estate Network - Real Estate Agents
Full-service residential and commercial real estate agent.

RE/MAX - Real Estate Agents
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Seattle Real Estate - Real Estate Agents
Real Estate company serves buyers and sellers in the greater Seattle area. Offers property details, maps and other consumer oriented information.

Weichert Realtors - Real Estate Agents
National real estate agent offers thousands of listings in Connecticut, Washington DC, Delaware, Maryland, New Jersey, New York, Pennsylvania, and Virgina.

Vietnam promotes real estate to Singapore investors

2008-03-04T07:48:00.000-08:00

Vietnamese leaders from six provinces and cities will present investors with property information at a seminar in Singapore today.

The leaders, from Hanoi, Ha Tay, Bac Ninh, Hung Yen and Hai Phong in the north, and the central province of Thua Thien-Hue, will join representatives from Vietnamese real estate companies to promote property opportunities.

Over 200 potential investors are expected to attend the two-day seminar, entitled “Vietnam Real Estate 2008.”

(thanhniennews)

Real estate sales slow, prices still high

2008-03-04T07:44:00.000-08:00

Despite measures to tighten lending for property speculation, real estate prices in Ho Chi Minh City are expected rise, although at a slower pace.

A day at A.K.T.V Real Estate Agency in Ho Chi Minh City goes by quietly with only a handful of customers dropping in to list their land for sale.

Other property trading centers in the city have been experiencing a similar decline in transaction volume over the past week, which some say is caused by commercial banks’ decision to tighten credit on property loans.

Banks last week tried to limit their exposure to Vietnam’s risky land market, tightening the guidelines for property loan applications in a bid to minimize lending to speculators.

Yet prices remain high with a square meter of residential land in districts 2 and 9 costing up to VND40 million (US$2,500).

Nguyen Cong Huy, an A.K.T.V’s customer, said he went to the agency to find buyers for two lots he bought last August in Truong Thinh Company’s residential project in District 9.

“I heard banks would reduce lending to real estate investors so I fear land prices will go down as a consequence,” he said.

Huy said he was offering his land at VND16.5 million ($1,030) per square meter.

Like Huy, other “intermediate” investors are also trying to offload their land.

Land in Gia Hoa, Nam Long and Dong Duong companies’ residential projects in District 9 are being re-sold at around VND500,000 to 1 million ($31 to $62) per square meter higher than the original sale price.

The general price level, ranging from VND13 million to 18 million ($813 to $1,125) per square meter, however, still seems too high to attract buyers.

Over the past week, three real estate agencies on Tran Nao Street in District 2 have not found any customers for the 16 lots in Gia Hoa Company’s project entrusted to them.

In the South Saigon New Urban Area, prices also remain at their all time high despite a low transaction volume.

Many intermediate investors are now reselling residential lots at between VND24 million and 98 million ($1,500 to $6,125) per square meter.

Still on the rise

Pham Van Thuong from the Bureau of Housing Management’s real estate market management office says the property market will be quieter this year than last but will still continue in an upward trend.

Banks’ tighter credit may make it more difficult for property investors to apply for loans to finance their projects.

The law permits investors, especially housing investors, to use funds from prospective customers to help finance the project.

Thuong said this could provide an alternative to bank loans.

As for the new government measures to speed up housing projects in a bid to narrow the gap betweendemand and supply, Thuong said results will take time.

“It will take at least two years before we see any significant increase in housing supply,” he said.

In addition, Thuong said, despite minor fluctuations in recent years, the domestic property market has been rising steadily.

“It has soared and descended,” Thuong said.

“But it has never plummeted.”

To keep prices rising in a healthy manner, the government needed to explore bold measures to increase supply, Dinh Duc Sinh from the Real Estate Business Association said.

Sinh suggested allowing intermediate investors to buy apartments as soon as a project’s foundation was completed.

First-time investors, on the other hand, were cautioned against entering the market in its present hard-to-predict phase.

Real estate sales slow, prices still high

Despite measures to tighten lending for property speculation, real estate prices in Ho Chi Minh City are expected rise, although at a slower pace.