At a recent finance and property seminar, Deputy Minister of Construction Nguyen Tran Nam said property businesses had been under pressure, experiencing difficulty getting capital, finding buyers and paying bank loans.
“The increase in bank lending rates to 21 percent a year in June also forced the property market to put up prices by between 5 percent and 10 percent,” he said. Lending rates were about 12 percent prior to June.
“Many investors had to negotiate with their contracted customers for higher prices after the cost of construction materials rose by up to 30 percent.”
He also said most property enterprises were expected to repay their bank loans by the end of this year.
“The real estate fever late last year was mainly financed by bank loans,” said Institute of Informatics and Applied Economic Research Director Dinh The Hien. “Under government policies to curb inflation, the real estate market has slowed because investors had to sell property to pay their debts.”
“It is hard to find profit in the real estate market in 2008,” he said. However, Hien said while investors in property projects faced difficulties, this could translate into good opportunities for cashed-up buyers.
By Tran Thanh Binh |
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