batdongsanvietnam
05-16-2008, 07:32 PM
The 50% real estate price decrease in the last three months made a lot of investors hover between life and death. However, experts said that the real estate prices still have not touched the ground.
Falling to the 2007’s price levels
The land prices of the Nam Sai Gon and Thu Thiem new urban areas projects have been sliding for months. The land prices of Him Lam Kenh Te project in district 7, which was once considered the hottest area, is now witnessing the sharpest price decreases.
In general, land plots are now offering the prices which are just equal to 60% of the highest peak prices six months ago.
While the land prices are sliding, the demand for land and houses remains very low. Some big real estate trading centres said that very few successful transactions were seen in the last time. Clients just come to ask about the prices, while no one really wants to make transactions
The apartment market has also been witnessing unexpected changes. The luxury apartments, which thousands people scrambled to register to buy several months ago, remain unsalable. Sky Garden 3 was a typical example. Among 1,000 apartments registered to buy in 2007, only 300 contracts on purchasing 300 apartments were signed.
Thousands of people weeping
The dramatic price falls have been making a lot of people, who bought land and houses at the time when the prices were at the highest peaks, hover between death and life. The investors, surfing on investments, prove to be the biggest sufferers, as they have to sell land and houses when the prices are going down, to pay bank debts.
However, experts have warned that the worst times of the real estate bubble burst are still ahead.
Experts said that most of the investment capital injected in real estate was bank loans. The real estate credit contracts, which were signed at the time when the real estate prices were at the highest peak, will become mature. By that time, the volume of non-performing loans will be very big as a lot of borrowers cannot pay bank debts. A huge volume of capital has still been buried in land and houses.
If so, commercial banks will have to sell the mortgaged assets, which are also properties. When the properties were brought to banks as the mortgaged assets, they were valued at high prices. Nowadays, as the property prices are falling down dramatically, the value of many loans prove to be higher than the value of mortgaged assets.
Experts have warned that if the real estate market cannot recover in two months, (and it is really not highly possible to see that in two months), the banks that have a high proportion of real estate credit will fall into crisis. This will be the worse thing to occur when the bubble bursts.
Contact : Real Estate Viet Nam
Mr Bill Nguyen
Email: contact@re24h.com
YM : Hauthu81@yahoo.com
Falling to the 2007’s price levels
The land prices of the Nam Sai Gon and Thu Thiem new urban areas projects have been sliding for months. The land prices of Him Lam Kenh Te project in district 7, which was once considered the hottest area, is now witnessing the sharpest price decreases.
In general, land plots are now offering the prices which are just equal to 60% of the highest peak prices six months ago.
While the land prices are sliding, the demand for land and houses remains very low. Some big real estate trading centres said that very few successful transactions were seen in the last time. Clients just come to ask about the prices, while no one really wants to make transactions
The apartment market has also been witnessing unexpected changes. The luxury apartments, which thousands people scrambled to register to buy several months ago, remain unsalable. Sky Garden 3 was a typical example. Among 1,000 apartments registered to buy in 2007, only 300 contracts on purchasing 300 apartments were signed.
Thousands of people weeping
The dramatic price falls have been making a lot of people, who bought land and houses at the time when the prices were at the highest peaks, hover between death and life. The investors, surfing on investments, prove to be the biggest sufferers, as they have to sell land and houses when the prices are going down, to pay bank debts.
However, experts have warned that the worst times of the real estate bubble burst are still ahead.
Experts said that most of the investment capital injected in real estate was bank loans. The real estate credit contracts, which were signed at the time when the real estate prices were at the highest peak, will become mature. By that time, the volume of non-performing loans will be very big as a lot of borrowers cannot pay bank debts. A huge volume of capital has still been buried in land and houses.
If so, commercial banks will have to sell the mortgaged assets, which are also properties. When the properties were brought to banks as the mortgaged assets, they were valued at high prices. Nowadays, as the property prices are falling down dramatically, the value of many loans prove to be higher than the value of mortgaged assets.
Experts have warned that if the real estate market cannot recover in two months, (and it is really not highly possible to see that in two months), the banks that have a high proportion of real estate credit will fall into crisis. This will be the worse thing to occur when the bubble bursts.
Contact : Real Estate Viet Nam
Mr Bill Nguyen
Email: contact@re24h.com
YM : Hauthu81@yahoo.com