When asked to give predictions about the real estate market’s performance in 2009, Don Lam, General Director of VinaCapital, a fund management company, who is an expert on real estate, said that it was very difficult to answer the question. 

Not only Don Lam, other experts are also not sure about the prospects for the real estate market in 2009, and hesitant to give concrete predictions. 

VietRees, a market surveyor, collected the opinions of 33 real estate experts, domestic and international. 70% of the experts said they were not certain about when the real estate market would recover. Only 12% of experts asserted that the market would recover by the end of 2009, while the remaining experts thought that the market would recover after 2009. 

The hesitation of experts reflects the instability of the real estate market: The market’s performance in 2008 went completely contrary to all predictions. 

By the end of 2008, the factors which caused the falls of the real estate market had been settled: the high inflation had been curbed, construction material prices had decreased, while monetary policies had been loosened. However, experts still remain uncertain about the market’s future. 

Dang Hung Vo, PhD, former Deputy Minister of Natural Resources and the Environment, said that capital shortage will not be a problem in 2009 as monetary policies have been loosened, bank interest rates have been lowered to stimulate demand. However, Vo still does not think the market will be brighter this year compared with 2008. 

Lower interest rates do not mean that banks will push up loaning for real estate projects. Banks will focus on collecting debts from the loans they gave one year ago rather than providing new loans. The uncertainties of the market will force banks to keep cautious in disbursement. 

Vo believes that in 2009, real estate developers will be under pressure to lower sale prices to boost sales in order to get back money for bank debt payment. In which case, prices would tend to decrease. 

“There seems to be no possibility of the real estate market recovering in 2009,” Vo said. 

Meanwhile, Nguyen Do Viet, Assistant to the Chairman of Nam Cuong Group, argued that the real estate market’s performance heavily depends on the ‘orbit’ of cash flow of the public. By mid 2009, a lot of deposits will become mature, while people are not likely to continue making deposits due to the low interest rates and they will try to make investments themselves. 

If the government’s demand stimulus package brings effects, and if people believe that stock prices have bottomed out, while the real estate prices have decreased to become attractive enough, they will inject money in the two channels. 

If so, the stock market will recover first, which will then bring about the recovery of the stock market, around the third quarter of the year, he said.

Conversely, if the government’s demand stimulus package is slow in bringing effects, it will take more time for the market to recover. 

Though certain that the real estate market will continue facing a lot of difficulties, Pham Thanh Hung, Deputy General Director of CEN Group, a real estate developer, said that transactions in 2009 will be more satisfactory than in late 2008. 

However, Hung does not think that there will be big changes in real estate prices. Some areas and projects will see prices drop further, while some other areas and projects may keep prices unchanged if the infrastructure in the areas is improved. 

“There will be a lot of investors facing bankruptcy. A lot of investors have announced tremendous projects, but they still cannot do much. There will be the investors who die quietly and slowly,” Hung said. 

Source: DDDN/Doanh nhan