mproving macroeconomic fundamentals, including the return to single-digit inflation – headline inflation slowed further to 6.9 per cent year-on-year last month from 8.3 per cent in May – and an increase of almost 21 per cent y-o-y in retail and services turnover, have finally seen residential buyers beginning to explore the market for opportunities.

Property developer CapitaLand launched last Friday sales of the first of three under-development apartment blocks in its PARCSpring Project in District 2. It is targeted at genuine home buyers, costing around US$1,000 per square metre.

Deputy CEO of CapitaLand Viet Nam said the almost 120 apartments on offer, which will be completed by 2013 end, have evoked positive interest among potential customers. But they still have to consider loan possibilities, he said.

Marc Townsend, managing director of property services firm CBRE Viet Nam, said his company is getting an increasing number of inquiries for residential purchases.

"But there has not been an increase in transaction volumes.

"Obviously buying a residential property, be it for investment or personal occupation, is a huge decision and financial commitment – as such we are now seeing buyers looking, but not touching. We expect this increase in inquiries to translate to an uptick in sales around the turn of the year," he said, adding that most of the inquiries came from end users.

Perhaps his opinion is too cautious as several developers in HCM City have reported positive signals.

On the first sale day of Company 557's Au Co Apartment Tower in Tan Phu District, half of the 147 units on the offer were snapped up, thanks to the average price of VND1.1 billion (US$53,000), a 7 per cent discount, and loans offered by its partner bank at a reasonable interest rate.

Hung Thinh Land recently began sales of 88 units at its project on Nguyen Chi Thanh Street in District 5 at an average price of VND1.5 billion (US$72,000) and 50 per cent were booked in just a few days. The company's deputy general director agreed however that it was just an early signal since many people merely showed interest.

According to CBRE figures for the second quarter in HCM City, demand was solid in the mid-end and affordable segments. Areas of interest included Tan Binh District close to Tan Son Nhat International Airport and Binh Chanh District close to the Vo Van Kiet (East-West) Highway.

Meanwhile, the number of units built in the second quarter increased by almost 90 per cent quarter-on-quarter, with 2,500 units hitting the market, 57 per cent of them in the affordable segment.

More of them are expected through the year as work on projects that were previously delayed, also mainly in the affordable segment, is resuming.

Equitisation of State firms

Equitising 93 State-owned enterprises (SOEs) is the target set by the Government for this year, but this seems unlikely since in the first four months only four companies completed their equitisation.

Nguyen Duy Long, head of the enterprises renovation, arrangement and development section in the Ministry of Finance's Corporate Finance Department, said the slowdown of the stock market, apart from other macroeconomic difficulties, has had a negative impact on SOE equitisation.

But he also pointed out that the first quarter is generally a time when enterprises focus on making their financial reports, so the number of SOEs equitising in a year's first half is normally lower than in the second.

Dinh Quang Tri, deputy general director of the State-owned Electricity of Viet Nam, explained that regulations do not allow State-owned corporations to sell their stake at a loss, and with the stock market being sluggish, equitisation has been tardy.

"Their shares can find buyers if sold cheaply, but it will be a violation of these regulations," Tri said.

Besides, to safeguard public funds, State corporations with a chartered capital of more than VND500 billion (US$24 million) operating in the aviation, post and telecommunication, petroleum, and certain other sectors will have to get a valuation done by the State Audit Office though they have already been valued by an independent consultant. This will obviously lengthen the process.

Equitisation kicked off in 1992 and was sped up in 2001. By the end of 2011 almost 4,000 SOEs had become joint-stock companies. Currently the State holds 100 per cent in over 1,300 enterprises of which around 600 plan to equitise by 2015.

(source: VietnamNet)