HCM City (VNA) – Vice Chairmanof the HCM City People’s Committee Le Van Khoa asked relevant departments toimprove management and take measures to tackle factors that could create theconditions for a property market bubble.

Khoa pointed out during a working sessionwith the municipal Department of Construction this week that there is ashortage of low and mid-end apartments, while high-end properties are abundant.“The imbalance in supply and demand must be tackled,” Khoa said.

Khoa said that the city needed a sound planfor urban development and policies to attract capable developers, especially inrenovating degrading apartment buildings.

Tran Trong Tuan, Director of theconstruction department, said that his team would focus on improving the urbanlandscape and hastening the development of key and unfinished projects.

He said a research project on the city’srealty market neared completion and would be proposed to the People’s Committeewithin the first quarter of this year.

Tuấn said that the city would also focus ondeveloping homes for low-income earners and workers at prices ranging from 300million VND (13,200 USD) to below 1 billion VND per unit.

The city plans to complete 30,000 apartmentunits for low-income earners by 2020.

The HCM City Real Estate Association alsorecently raised ten proposals to promote the development of the realty markettoward transparency and sustainability.

The proposals included amendment to thelaws on land, real estate business together with administrative reforms, creditpolicies and house ownership policies.

However, traffic chaos could put brakes onrealty market.

HCM City’straffic woes, with jams regularly occurring in most places, are affecting thereal estate market, especially with a myriad of new housing projects set to becompleted soon.

But many have seen it coming for a longtime, and developers have avoided some of the bad areas or are unable to sellafter building in places with inadequate traffic infrastructure.

For instance, although facilities insideare well developed, a villa project each in District 9 and Thanh My Loi inDistrict 2 had failed to attract buyers.

Also in District 9, Do Xuan Hop, a narrowstreet with a fair amount of traffic, has four apartment projects with nearly4,000 flats.

Nguyen Xi Road, very close to Mien Dong(East) Bus Station in Binh Thạnh District and just five metres wide, has threeapartment buildings -- Thuy Loi, Saigonres Plaza and Richmond City.

In the area near Tan Son Nhat Airport,traffic jams are an everyday occurrence but housing projects are mushrooming.On Hong Ha Street alone there are five apartment projects.

Roads in the north-west of the city like CongHoa and Truong Chinh have a chronic traffic problem. But here the real estatemarket has not developed much. Not many apartments have been built in this areathough there are many vacant plots of land.

Tran Duc Vinh of Tran Anh Long An RealEstate Joint Stock Company was quoted as saying by Dau Tu (Vietnam Investment Review)newspaper that a nightmare for developers is building a project in an areawhere traffic infrastructure is not adequately developed.

He cited the example of his own company’sBella Villa project, saying traffic jams are a constant occurrence in the areabecause of poor infrastructure, and as a result, his company could not beginsales on schedule.

The same situation is also witnessed inDistricts 7 and Nha Be since there are only a few bridges connecting them withthe city centre while innumerable housing projects have been developing there.

River City project on Dao Tri Street isunable to attract buyers due to the traffic situation.

Nguyen Huy Vu, general director of Ban VietReal Estate Service and Building Company, predicted 2017 to be a hard year fordevelopers trying to sell their products because of the traffic problems.

The problem has been brewing for a longtime but not been fixed, and this year developers would suffer, he added.

A CBRE executive, talking about theprospects for the city real estate market, warned that transportation would bea thorny issue.

She told Vietnam News that trafficjams were a serious issue affecting the development of the market.

Le Hoang Chau, the chairman of the HCM CityReal Estate Association, said the development of the property market andinfrastructure should occur simultaneously.

"The city’s infrastructure is designedfor a population of three million, which has now risen to 10 million," hesaid.

To resolve the problem, he said developersshould play a part in developing infrastructure when they plan a new project.

Vu agreed with him, saying city authoritiesshould insist that companies develop surrounding infrastructure when building anew project.-VNA