Vietnam’s real estate market may continue to fall to next year as more banks sell their guaranteed assets and investors further cut prices.

Real estate market may be gloomier next year

Banks are shifting assets in a move that started in late 2011 but will further develop in the time to come due to a serious shortage of capital.

Over the past period amid economic difficulties and tightened monetary policies for the real estate market, several banks have yet to sell off their assets due to the market slump and weak asset evaluation on the part of financial institutions.

Ly Van Manh, General Director of Hung Vuong Group, said the future of the real estate market would heavily depend on the country’s economic situation next year. If credit is not loosened, a gloomy outlook was inevitable.

The few real estate investors who don’t have bank debts may survive amid such context while others may have to further lower prices to cut losses.

Several experts said that in theory the market would bottom out when selling prices equalled initial investments and the market would fall to below these evaluations if prices further decrease.

However, several projects, despite low initial investments have still had to apply sharp price cuts due to the dramatic plunge in market valuations.