New strategy ruffles feathers: foreign property investors delay closing deals, Oct 27, 2008

Foreign investors remain hesitant to take over locally-owned real estate projects as they expect land prices to further decrease as a result of the credit crunch and gloomy property market in Vietnam.

Do Thi Loan, general secretary of Ho Chi Minh City Real Estate Association, said many foreign companies had asked the association to help find a local partner for developing real estate projects but they had not been ready to seal a deal, claiming they wanted to wait for the financial market stabilised and Vietnam banks to start again lending for individuals to buy houses.

“My feeling is foreign partners do not want to continue projects and want to make local partners get tired and quit the project,” said Loan. The allegation stems from the fact that many projects have seen stalled negotiations for more than a year due to site clearance and construction funding hurdles.

Loan said a leading property developer from Hong Kong was tiring out local partners due to financial requirements.

“Foreign partners seem to keep waiting for cheaper land to buy from Vietnamese developers. The question here is what is the real attitude of foreign property developers in Vietnam right now,” said Loan.

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