HCM City (VNS/VNA) - The HCM City Real Estate Association (HoREA) hascalled on the Government to resolve problems related to legal andadministrative procedures and access to funding and cut lending interest ratesto revive the property market.

The total value of unsold property inventories held just by firms listed roseto 223.474 trillion VND (9.62 billion USD) last year, a 38 percent rise from2018, HoREA said in a report. 

Twenty four of them have inventories of over 1 trillion VND, four largecompanies have inventories of 4.2-7.4 trillion VND and the top two account for63 percent of the value, the report says.

“Real estate inventories will become a burden for businesses and the economy.”

The inventories are due to legal problems, which have caused incompleteprojects to stall and completed products to remain unsold, it explains. 

Most listed real estate firms have seen profits fall in the last few yearsbecause they could not sell their products or have nothing to sell, itsays. 

HoREA urged the central and local governments to address the legal andadministrative problems and to speed up the handling of projects subject toreview and inspection so that they could be completed. 

It urged developers to focus on liquidating their inventories and paying offoverdue debts. They should restructure products to match people’s incomes,restructure prices and even accept losses to sell their inventories, itsays. 

Hundreds of real estate projects have been stalled in recent years due tocumbersome administrative procedures.

According to property consultancy CBRE, the housing market this year willdepend on whether the legal issues that plagued the market last year areresolved. 

Vo Huynh Tuan Kiet, associate director and head of residential projectmarketing at CBRE Vietnam, said thus there could either be a continuing supplyshortage and escalating prices or a supply revival and competitive prices.

In the first scenario, if the legal obstacles continue to persist, inventorieswould decrease gradually due to a lack of new supply, prices would escalate andthe suburban market might surpass the downtown market, he said.

In the second scenario, the barrier of legal risks would be removed, resultingin a surge in supply and a gradual increase to inventories, he said.

But the abundance of supply would lead to more competitive prices, headded. 

According to a report by HoREA, the city currently has nearly 15,000 realestate businesses, and of its nearly 9,000 large businesses, more than 30 percent are in property development. 

In 2018-19, most real estate businesses faced difficulties, causing the marketsize to shrink sharply./.