VietNamNet Bridge - The Ministry of Construction (MIC) reported that the real estate market has warmed up as apartments have been selling well, thus reducing the inventory considerably. However, analysts have expressed doubt about the figures.

In a report released in late May, MIC said real estate prices increased slightly in 2014-2015 after dropping dramatically by 30 percent in 2013.

Some apartment projects were put up for sale in the first quarter of 2015 with the selling price up 5-10 percent in comparison with the same period last year.

The ministry also predicted the market’s high growth rate in 2015 with successful transactions in the mid-end and high-end market segments increasing by 2.5 times compared with 2014.

The report also showed that the real estate inventories have been decreasing steadily over the last few quarters and months. The total inventory value had dropped to VND67.443 trillion dong by May 20, a decrease of VND1.3 trillion compared with April.

Of this, over 12,000 apartments worth VND19.8 trillion and 9,066 houses worth VND16.13 trillion were unsold.

The warming up of the real estate market has encouraged commercial banks to disburse more money for the market. 

MIC quoted a report as saying the loans provided to real estate projects had reached VND333.7 trillion by March 31, while the non-performing loan ratio had been 5.61 percent by that time.

The investors of 60 commercial apartment projects with about 39,000 apartments have asked for permission to shift to housing projects for the poor.

Prior to that, when MIC reported that the real estate inventory had reduced to 40 percent, Nguyen Van Duc, deputy general director of Dat Lanh Real Estate, deputy chair of the HCM City Real Estate Association, commented that the figure was “too optimistic”.

“Officials asked real estate firms to report how many apartments real estate developers could sell every month and then they added up the reported numbers,” he explained. “No one came to the construction sites to see with their own eyes how the projects were going.”

Duc confirmed that 10 percent of projects had not sold. However, he thinks it is necessary to clarify the meaning of “inventory house”.

“We cannot call the sold apartments of the projects that are still under construction as ‘inventory’,” he said.

An analyst, agreeing with Duc, noted that MIC has provided the wrong figures because of its inappropriate calculation method.

“It is necessary to show the difference between the sale of inventory and the sale of new products,” he said.

Duc, while noting that the market has warmed up, thus helping the sale of apartments of 40-50 projects, the remaining 700 projects still face big difficulties.

Dat Viet