etName: Vu van kiet
Research Question: The problem in Vietnam real estate industry
Viet Nam Real Estate Industry
Vietnam real estate industry was one of fastest growing and most potential in Southeast Asian from 2005 to 2009, but according to a research of Business Monitor International company in 2012. In past few years Vietnam real estate has been greatly suffered because of high inflation, bad debts and oversupply.
Vietnam real estate market has been fall because of the falling of US dollars and weakening of Vietnam dong (VND) because of high inflation, and because of high inflation the value of VND has been falling a lot and due to loss of the currency, more and more people now are trying to convert money into dollars or gold because they afraid that if they still keep the VND they will just lose more money, this will be consequence for real estate market, because most of transaction in real estate are in dollars, according to (Weak Vietnam dong could hit Vietnam’s real estate market,2011). So if people converting money into dollars, then the balance in the monetary system will be loss because there is no movement between VND and Dollars in real estate transactions since people trying to convert money into dollars, and if it continue like this, slowly there will no more real estate transaction in VND anymore since people only use dollars for transactions because the dollars has more value of international transactions than VND. ‘Thus, exchange rate-related risks are passed on to homebuyers. Even 100% Vietnamese- invested residential developments post prices and require payment in US dollars.’ Meanwhile Vietnam real estate market has to face another threat is Bank bad debt, in research of ( Pham h, 2012) Real estate bad debts are much higher than the actual. By the end of 2011, the total of loans that the real estate market had borrowed from the bank is 348 trillion (VND) is 1.8 times higher than the...
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