City takes creative property solution

Ho Chi Minh City is set to think outside the square and convert its oversupply of unsold apartment developments into schools, hospitals or low-income housing.

Le Thanh Hai, Ho Chi Minh City Party Committee Secretary, raised these possibilities during a four-day committee meeting that discussed various strategies for the city to reach its 2013 gross domestic product (GDP) target of 9.5-10 per cent. 

After a review of the city's needs, the large inventory of unsold housing could best be converted to other functions, Hai said. This would enable debt-ridden developers recover some of their losses and alleviate "the frozen real estate market already seen these past few years," he said. 

(Photo: Le Hong Thai /SGTT)

Real estate loans totalled VND203 trillion ($9.7 billion) as of August 31, of which 6.6 per cent were classified as bad debts, Minister of Construction Trinh Dinh Dung told the National Assembly late October, citing a State Bank report. 

Real estate experts believed that current home prices in Vietnam were still much higher than the levels the general public could afford. Ho Chi Minh City Real Estate Association chairman Le Hoang Chau said the owners of some housing projects have recently cut prices by 30 per cent, but found few buyers. 

At the Ho Chi Minh City Party Committee meeting, Hai said a very important measure for the city's GDP growth target of 10 per cent was "not to let enterprises in general stop operations because of no access to capital." Therefore, banks and lenders are required to act to that end. 

He added the city had to make more efforts to make the results higher than the target so that it could achieve a 12 per cent growth for 2011-15. 

The economic hub estimates its 2012 GDP growth at 9.2 per cent. Next year's 10 per cent rate means the city would achieve per capita income of $4,000. 

Tuong Thuy