Impacts of Vietnam's tight monetary policy on Hochiminh City's real estate market in 2011 Free essay! Download now
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Impacts of Vietnam's tight monetary policy on Hochiminh City's real estate market in 2011
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| Words: 3942 | Submitted: 09-Dec-2011
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Descriptionan analysis about the impacts of Vietnam's tight monetary policy on Hochiminh City's real estate market in 2011
Table of Content
I. Ho Chi Minh City Apartment Market in 2008 2
II. Ho Chi Minh City Apartment Market in 2011 5
III. Inflation of Vietnam in 2011 6
IV. The Vietnam Government’s monetary policy in 2011 7
V. The impact of the monetary policy on
Ho Chi Minh City apartment market in 2011 7
IMPACTS OF THE VIETNAM GOVERNMENT’S MONETARY POLICY ON
HO CHI MINH CITY APARTMENT MARKET 2011
I. Ho Chi Minh City (HCMC) Apartment Market in 2008
The entire real estate market decreased sharply in 2008. Many projects went down by 60-70% of its value compared with that at the end of 2007 and had no signs of prosperity. Experts predicted this fall was only the first milestone of the declining period ahead.
The real estate market faced a series of unexpected incidents in 2008. From the tightening of credit, discounts, loss of customers, loss of investors to fraud, claims for refund, litigation and disputes, all happened. However, besides quiet transaction situation, it was the unbelievable negative 60-70% rate that has never been seen before that acted as a strong strike on business circle, investors and customers ‘surfing’ in the real estate market.
Since late February 2008, due to the information that the Ministry of Construction was planning to apply progressive taxation on real estate and banks would apply a credit tightening policy, the real estate market has been shocked and responded by promoting tiny price reduction at 5-10% discount. In the prelude of the melody of decrease, many businesses had foreseen the bleak future. They promptly prepared to get ready for the worst news that housing prices would be dropping in many months later.
The situation evolved exactly to that anticipation, from March to May 2008, the market decline spread widely with average depreciation of 20-50%. That time many investors started to discuss the concept: “Where is the bottom of housing prices?” However, surprise appeared time after time.
From June to October 2008, the real estate market continued falling into crisis and dropped down to deeper levels. This time many projects were depreciated to 60-70%, which was beyond expert’s forecasts. This phenomenon was explained that the Vietnam Government’s macroeconomic policies had had a strong impact on the real estate investors. In addition, virtual values that made the real estate bubble inflated in 2007 were pierced and deflated gradually.
In the final two months of the year, real estate prices started unchanged or decreased by 5-7% on average. However, while luxury apartment segment found a temporary balance after three quarters of shaking, the prices of villa land hurriedly fell down. Never the less, when selling this kind of product, investors ...
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