The cool-down in condo sale in Hanoi is actually a good opportunity for investor and future residents Dr. Nguyen Ba An, vice director of Development Strategy Institute – Ministry of Planning & Investment, said: at “the capital resolution of corporates” conference held by VCCI on May 10th 2011, Dr. Nguyen Ba An has sat down for an exclusive interview with “Dien Dan Kinh Te Viet Nam “about the capital of real estate and the market’s movement.

Real Estate is not a non-production industry. Real estate is non-categorize as non-production industry regarding banking & loaning would you please share you’re your though it’s on this matter.

The term “Non-production” is mainly focus on real estate trading not developing. The traders are willing to accept wish interest & high risk, this can create the “hot-balloon” in real estate endanger. The economic and divert the must-needed capital into freezing access to the capital needed for their productions.

According to some expert, in the last 10-15 years, real estate wasted millions not billions of USD in term of land-resource. This should be a potential resource for developing if property managed by the government.

Hence, one of the most important riddle in the future strategy of Viet Nam is to re-modeled the …. & management body of the government on land-resource, so it can satisfy the government’s interest, the owners’ interest & the developers’ interest. Once managed so, the need of administrative measures will vanish.

What will this categorize affect real-estate developers & manufactures of building material? Will that be necessary to differentiate than in term of loaning?

The main concern now is the market (real-estate) is maintained by tracking activities.

Capital restraining is reluctant

Of course this administrative measure is also affecting manufacturer & developers, but it is crucial the goal of controlling inflation.

Is this measure the main cause to the freezing of real-estate market?

It certainly is, beside, the low confidence of investors also plays an important role.

So, in your opinion, what is the optimal solution for the market?

The core answer for the market is a sustainable macroeconomic condition. We suffer annual deficit of 5% yearly and public spending is far too big, the accumulation over the year now able for strong measure for stabilize the economic and reduce inflation.

Only then, the economic can recover and Real Estate, the end of the monopoly game, can recover.

Good time for buying

Is this the right time for catching the bottom, sir?

This actually is the good time for investor to buy, since the recession will kill off those add-in created in tracking and investor that have no demand of borrowing will benefit.

Once the economic coming out of recession and this restriction is removing

The recession, still, is not end in a foreseeable future, and could lasted as long as the 2001-2005 period hence borrowing is at huge rise with the current borrowing rate of 25%.

But there are also predictions of a real-estate “balloon-busting” in 2012, so will that be wishes for the investor to wait until them.

That is still a prediction, but not without sounding background considering the demand of 6-8million Hanoi resident and the supply of hundreds of condominium urban projects will ensure over supply in this market.

Hanoi’s real estate market is ruled by trading activity

Banks are concern that real estate borrowing needs is mainly from investors, not developer, so is that a sign of trading over ruling real demand?

This concern is actually a fact.

The landing rate at 25.27% has created by many level of trading from developer to big investor, small investor. The also borrow to buy, hoping to earn when re-trading, this secondary market is bigger and over ruling the real market of future residents of those projects.

So, will you think there would be a stimulus package such as of 2008-2009 from the government to rescue this section?

There would become in near future, since the government now is concentrate on stabilize the economic & inflation control in 2011-2012 and that the greater goal and need than those of real-estate sector. Once the economic recovery, real estate will benefit as well.

Thank you sir!