Ho Chi Minh City Real Estate Association releases project figures and recommends solutions to move forward.
Ho Chi Minh City has 201 real estate projects now under construction and 689 projects delayed, with the latter accounting for more than 49.1 per cent of all registered real estate projects. There are also 85 projects that have been revoked or canceled.
The figures were contained in a report released by the Ho Chi Minh City Real Estate Association and providing an overview of the city's real estate market and making recommendations on dealing with the difficulties the property market will face over the next few years.
According to Mr. Le Hoang Chau, Chairman of the Ho Chi Minh Real Estate Association, despite some positive signs the market continued to be beset by problems in 2014. While the government's housing credit support package, worth VND30 trillion ($1.4 billion) to help low-income earners secure housing, has disbursed about 12 per cent it is too low and falls short of expectations.
To have a stable and sustainable market, the Association suggests interest rates in the housing credit support package be between 4 per cent and 4.5 per cent per annum instead of the current 5 per cent. The government should also allow a grace period of three years, where borrowers don't pay any interest.
It also recommends that the government and the Ministry of Construction allow unfinished commercial projects with prices less than VND15 million ($700) per square meter to access loans for completion, which would contribute to addressing the number of delayed projects.