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Vietnam Real Estate Firms Seek Government Help

Nguoi Viet , Posted: Dec 01, 2008

The government should help boost the property market, which has been in a slump since earlier this year, a bank official said.

Dinh The Hien, an Exim-bank board member, said property is the most common collateral for bank loans, adding it accounts for 80 percent of outstanding loans.

''Without the governments assistance to boost the market, banks will have to sell off or occupy properties of borrowers who fail to repay debts. [This] will send supply surging, depressing property prices further.''

But Kien Long Banks deputy general director Phạm Khắc Khoan said it takes banks three years to complete the procedures required to dispose of a property.' 'Properties that are in demand should be sold first,'' he said, to prevent prices from plunging. Many delegates at the meeting agreed with a recommendation to set up a fund of $2.9 to $5.8 billion to help banks deal with bad debts that involve property as collateral.

The money can found in the reserve commercial banks hold with the central bank, the central banks monetary stabilization fund, the governments price stabilization fund, or the money raised from divesting the governments stakes in state-owned companies. Hien said property firms are now struggling to find buyers. ''Therefore banks and state-owned property firms should draw up incentives to encourage people to buy houses,'' he said. Nguyen Huy Cuong, director of Sacombank Securities market research department, said, ''Property firms should focus on selling houses worth more than $29,500, which have a huge demand.'' At another meeting held by investment fund Vina-Capital last week, real estate consultant Savills CEO Brett Ashton said the housing market is bottoming out and was not sure when it would bounce back.

Phu My Hung Corp.s marketing director Alpha Chen expected the market to take at least three years to rally.

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