JANUARY 2011:ISSUE 05 • The real estate news and information source • www.coldwellbankervn.

com

10 real estate event in 2010 highlights

Land fever in short duration in Ba Vi; Controversy over West Lake - Ba Vi Highway; Continuous Announcement of Super Projects; or Land Sale of Thanh Ha
Project without Payment are all considered as real estate events in 2010 highlights.

1. Fierce controversy around the West Lake - Ba Vi Highway

In late 2010, the Ministry of Construction submitted its general plan and vision of Hanoi from 2030 to 2050 to
the Government. Prior to its submittal, the plan generated many opinions from the masses in Hanoi and Ho Chi
Minh City with many concerns, questions, the criticisms by experts and scientists.

According to the plan, the Administration Center will be located in the foot of Ba Vi Mountain. Some Experts
argued, however, that Doai is not an economically dynamic region. It is actually more suited to the
conservation of culture, cultural tourism, ecotourism and resorts. If the National Administrative Center is
moved to the foot of Mount Ba Vi, this means that the Government and other agencies are put into states of
relaxation, no dynamism, no flexibility, and accordingly it is very dangerous.

Fierce controversy between the Ministry of Construction and Ha

Noi City when the Ministry said “the West Lake - Ba Vi Highway
is necessary” while Hanoi protested, “not necessary ". The final
conclusion may satisfy both parties - still need the highway but it
is not called highway!
In addition, public opinion poll results on the general plan in the capital of Hanoi figured out two issues obtaining
the lowest rates of agreement among many problems of the scheme, including location of the National
Administrative Centre (69.4%) and Thang Long Highway (76.5%). Then as Lang – Hoa Lac street is named
Thang Long Boulevard, the Highway is renamed West Lake - Ba Vi Highway by the Ministry of Construction.

There was a heated debate between the Ministry of Construction and Ha Noi when the Ministry said it is necessary to construct the West Lake - Ba Vi Highway
while Hanoi protested, “not necessary ". The final decision might satify the two parties: still need the highway but it is not called highway!

This decision also led to an unending argument between the Ministry and Ha Noi. The ministerial representative explained West Lake - Ba Vi Highway will solve
traffic problems. Despite not having been built, master plans must describe land to be kept; otherwise this plan will be replaced by other projects.

In contrast, leaders of Hanoi said that because West Lake - Ba Vi Highway will have great influences on many social-ecomonic areas as well as stable metropolitan
development, it not necessary to build this highway. However, afterwards, Ha noi suddenly changed their minds, affirming the necessity of the highway, but instead
of the straight highway, Hanoi suggested the deflection one along belt 4.

The controversy only ended when the Prime Minister finally approved the general plan of expanded Hanoi.

2. Land Fever to be dependent on land plans

2010 is the year the west is the most volatile. For example, Ba Vi became the focus of investor attention since
the general plan of Hanoi was announced. Many people expected the early real estate investments to earn
higher profits when the master plan is carried out, which results in sharp increases in land prices. When the
land boom reached its peak in Ba Vi, hundreds of people rushed to buy land causing prices to surge.

In the pinnacle of the fever, the land price shoots unbelievably;
even a plot can value billions of Dong.
When the fever is stamped out, investors hear rumours that head offices of ministries and branches will be in
My Dinh, plus Thang Long Boulevard – the most modern and longest street in Vietnam and expanded Le Van
Luong to be opened to traffic, which pumps new “vitality” into this area. Consequently, two sides of the
boulevard appear hundreds of large-or-small-scale real estate projects, including new urban area of Tay Mo –
Dai Mo, Geleximco, Areas of South and North An Khanh, Mieu Nha urban area, new urban area of Splendora
(Hoai Duc – Hanoi); Dai Mo Residential area; Petro-house complex.

In the pinnacle of the fever, the land price shoots unbelievably; even a plot can value billions of Dong.

A series of traffic lines and infrastructure were inaugurated on the occasion of Hanoi’s 1000 year anniversary together with the newly-built big bridges across the
Red river are also considered as “detonators” for the boom of real estate prices around the area. Those reasons have made Hanoi witness a land fever that it has
never experienced before over the past 10 years.

3. Vietnamese businesses scramble to build Skyscrapers

The trend of developing multistoried buildings in Hanoi first appeared about 10 years ago, starting with hotel
projects and office buildings and later spreading to residential developments. However, in 2010 - this trend
began to flourish and many believe this is the race for business polish.

Currently, Vietnam’s highest building and the world’s 17th highest is the Keangnam Hanoi Landmark Tower
at 336m with 70-storeys located on Pham Hung Road. The building was officially started in November 2007
and is expected to be completed in 2011.

People used to believe that height “champion” is Keangnam, but
it will soon be passed by Petro Vietnam Construction’s
102-storey tower in Hanoi.
People used to believe that height “champion” is Keangnam, but it will soon be passed by Petro Vietnam
Construction’s 102-storey tower in Hanoi. With a total investment of $ 1.2 billion and an estimated height of
528m, the PetroVietnam Tower (PVT) will be the tallest building in Vietnam and the second highest in Asia.
While the PVT building was considered highly unique (102 storeys high and a $1.2 billion investment), shortly
thereafter the Kinh Bac group also announced plans to build a 100-story skyscraper on Pham Hung Street, Hanoi.

In late October, the Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) began construction of a complex of offices, hotels, trade centers and
high-class services with a total area of 30,000 m2 in the urban area of Ciputra (Hanoi). The project has a total investment of $ 400 million, equivalent to nearly
8,000 billion VND, including two towers 68 and 48 storeys high.

Also in late October, the Bitexco Financial Tower - the highest building in Ho Chi Minh City was officially inaugurated standing at 262m tall with 68 storeys.
Shortly thereafter, Bitexco started the Ben Thanh Towers project in the city’s central area with two 55-storey towers.

Besides the above projects, property experts predicted that in the future there will be a wave of skyscrapers appearing in Vietnam.

4. Continuous announcements of super projects

This year sets a record with continuous super projects. A typical project consists of high-class resort complex such as in South Hoi An with $ 4 billion of investment
capital invested by Genting VinaCapital. The investor is waiting for the issuance of certificate from competent authorites assigned by the People’s Committee of
Quang Nam.

The first Las Vegas casino-style resort in Vietnam will be built in Ho Tram Resort (Vung Tau), with a total investment of about $4.2 billion. The golf course project
at Hoang Dong Lang Son Hotels will span more than 180 hectares in the central town of Cao Loc, Lang Son City, with a total investment capital of up to $2 billion.

The Happyland - Long An entertainment complex is built on an area of nearly 700 hectares with an investment capital of approximately $ 2 billion invested by Phu
An Construction Investment and Infrastructure Development JSC.

ArchiLand Vietnam JSC - Archi Group officially launched a series of three projects - Green Villas 4, Lam Son Resort, and Bella Resort. These are the
environmentally-friendly resorts because each project has proved to have at least 70% dedicated to green space. The total investment capital of ArchiLand Vietnam
in three projects is over VND 1,050 billion and is expected to be put into operation after three years of construction.

There are also many other projects such as the ecological urban area of Thuy Tu - Danang with total investment of $ 1.6 billion, the largest resort in the north of
Tam Nong.

5. Affordable housing to be “crowned”

2010 had a difficult start for the segment of luxury apartment buildings. “High-class” projects mushroomed but failed to satisfy the real demand and financial ability
of consumers while profit rates are too low against investment capital; as a result, these projects do not really attract speculators

Realizing such problems, investors target affordable house construction for low-income people. Typical project is located in Ngo Thi Nhiem Street jointly invested
by Vinaconex Xuan Mai JSC and Vinaconex 21 JSC, which have built five buildings for low-income people in Kien Hung Ward, Ha Dong District. Each building
with 19 storeys and one basement, the projects will offer totally 1,512 apartments with average area of 70m2/unit.

Viglacera Corporation has just commenced the construction of ten 12-storey apartment buildings in Dang Xa urban area (Gia Lam) while Handico started building
840 apartments for low-income people in Sai Dong new urban area. Noteworthily, there are a mass of proposed projects such as the social housing project in Thanh
Lam - Dại Thịnh urban area constructed by Housing and urban Development Holdings; projects in North An Khanh (Hoai Duc) built by Vinaconex-Hancico Joint
Venture; and projects of house resettlement and social houses making up 20% of the land fund in South Thang Long urban area constructed by Urban Infrastructure
Development Investment Corporation (UDIC).

From now until the end of 2010, many big construction companies also plan to build several housing projects for low-income people over the capital.

Mr. Phi Thai Binh - Vice Chairman of Hanoi People's Committee said the City is simultaneously developing housing for workers, students and low income people.
By 2015, Hanoi will build 15,500 apartments with 70m2 average living space per household - a total investment of VND 7,000-9,000 billion.

6. "Green light" for mini apartment buildings

After the Ministry of Construction issued Circular No. 16/2010/TT-BXD providing guidelines on implementation of Decree 71 on execution of Housing Law and
approved issuance of home ownership certificates (pink books) for mini apartment buildings, a new trend “flourished in mini apartment buildings”.

It is more simple legal procedure than that of normal apartment buildings that attracts investment of many real estate businesses.

According to experts, with regulation on sale of mini apartment buildings without the need of real estate trading floors and simple legal procedure compared to strict
regulations on normal apartment construction, such kind of apartments will strongly develop in the coming time.

7. Hanoi: Proposal to stop 50% of projects and withdraw series of pending projects
The People’s Committee of Hanoi has been conducting a review of 398 plans and projects whose capital is out of the State budget over 20 districts and towns
(excluding projects approved to be executed in Phase 1 by the Prime Minister (PM)).

After making careful consideration and analysis, the People’s Committee of Hanoi proposed the PM to allow the implementation of 202 of 398 plans. The proposed
plans and projects account for 21,456 hectares/total 41,664 hectares. Hanoi also proposed to the PM to temporarily keep 192 of 398 plans and projects (making up
19,607 hectares) which fail to or have not met the criteria of key and specific projects and are not under the permitted subjects to make pilot changes in planning
objectives.

In addition, the Department of Natural Resources and Environment of Hanoi also proposed the City to revoke 13 projects with area of 14 ha due to late
commencement and infringement of the Law on Land.

8. Lessons from the "selling houses on paper"

In April 2010, the Investigation Division of the Ministry of Public Security decided to prosecute criminal cases
of fraudulent appropriation of property breached by 1/5 Construction and Service Corporation (1/5 Corp). The
infringement began with the case that as Cienco 5 Land, the investor of Thanh Ha Project, mobilized capital
for the project, Cienco 5 Land signed a capital contribution contract with 1/5 Corp. The contract specified that
1/5 Corp lended Cienco 5 Land VND 200 billion within the term of 18 months at interest rate of 1% per month
with the condition that Cienco 5 Land will offer 1/5 Corp the priority of implementation of investment in the
project of Thanh Ha - Cienco 5 new urban area.

Afterwards, Cienco 5 Land canceled the signed agreement; however, 1/5 Corp still used the agreement to
conduct the sale of land of Thanh Ha- Cienco 5 Land Project to appropriate over VND 600 billion. This is one
Police agencies are carrying out procedures to arrest the director of hundreds of cases as “selling houses on paper” and also gives investors an undeceived lesson..
of 1/5 Corp for appropriating property through swindling.

Police agencies are carrying out procedures to arrest the director of 1/5 Corp for appropriating property
through swindling.

Experts said in case investors directly bought real estate from project investors, vital information and questions the investors have to obtain include: availability of
land for project implementation (attached with land use right certificate or decision on land delivery issued by functional authority); the master plan approval; the
project’s construction; the financial ability of the investors. All of these stipulations must be met before the project can progress.

9. Property market and the "warm, cold" policies

In 2010, the Government issued Decree 71 and Circular 16. Although many problems remain, the regulations are still believed to bring positive impacts on real
estate market.

Decree 71 providing guidelines on implementation of Housing Law which take effect since 8/8/2010 causes difficulties for wave-surfing speculators and investors
in their business operations. The Decree includes a lot of practical provisions and opened policies offering clear conditions and reducing administrative procedures;
therefore, the decision makes the real estate market more transparent, which will ensure legitimate rights for investors, enterprises, and home buyers. Besides, the
Decree also impacts the awareness of people to gradually change the old real estate transaction methods; accordingly this brings about many benefits for consumers
in approaching real estate products, especially residential ones.

The Circular 16 dated 15/10/2010 providing guidelines on implementation of Decree 71 allows assignment to notarize residential property formed in the future,
which real estate investors expected this to be the “lifevest” to save the market from the current gloom.

10. Real Estate ”to shift”

The decision to expand the administrative boundaries of the capital Hanoi an additional 3,000km2 has created an attractive business and real estate market for the
area. It is also the reason why many real estate businesses try to attack the Northern market.

Taking advantage of this opportunity, many investors from the South have been planning to target Northern market. They are: Refico with 19-storey Watermark in
West Lake; Bitexco with luxury apartment building of The Manor in My Dinh; Kinh Bac Corporation with Commercial and Service Building in Ha Noi; LAVICO
with Richland Southern in Xuan Thuy Street, Cau Giay District.

Last May, Him Lam Real Estate Corporation also inaugurated Him Lam Land Real Estate Trading Floor, and on this occasion, the Corporation launched several
projects in Hanoi, which promised a mass of large-scale projects the next years..

Recently, Dat Xanh Corporation officially opened Dat Xanh Corp in the North. Many other businesses such as Hoang Anh Gia Lai, Sacomreal, and Binh Duong
Trade & Development JSC (TDC) also plan to move "northward".

A “fleeing” wave is happening with enterprises in Hanoi due to blooming land prices. Many investors are looking for projects in the areas of neighboring provinces.
For example, Vinh Phuc is now having the most projects at which Ha Noi enterprises are aiming; subsequence is Bac Ninh, Hai Duong, Hai Phong, Hoa Binh, and
Thanh Hoa.

Southern real estate investors quickly see neighboring areas of HCMC like Binh Duong, Dong Nai, Tien Giang, Can Tho, etc, the Central area is now excited with
resort and tourism which make real estate prices soar in Da Nang, Nha Trang, Binh Thuan, etc.

Source: Dien dan Doanh nghiep

New policies to be applied as of January 1, 2011

Many new policies that will have significant impacts on the domestic market will be applied as of
January 1, 2011.

Gold Export tariff Raised to 10 Percent

From January 1, 2011, under a newly released decision by the Ministry of Finance (MOF) gold
materials and jewelry products with high gold content will have an export tariff of 10 percent
instead of zero percent. Besides, bar and ingot gold, powdered gold less than 99.99 percent gold
will also be have an export tax rate of 10 percent instead of the current rate of zero percent.

MOF believes that the new taxation policy will help prevent enterprises from “dodging the laws”,
trying to export gold bars as jewelry products. Under the State Bank’s regulations, enterprises will
have to ask for permission to export gold from 99.99 percent gold or more, but there is no need to ask for permission to export jewelry products with lower gold
content.

Foreign bank branches allowed to mobilize capital in Vietnam dong

From January 1, 2011, Branches of foreign banks will receive equal treatment with domestic banks as per Vietnam’s commitments when it joined the WTO.
Therefore, like domestic banks, foreign bank branches will also be able to mobilize capital in Vietnam dong, the one thing that they had been prohibited to do so far.

New Bank Laws Take Effect

The law on the State Bank of Vietnam and the Law on Credit Institutions ratified by the National Assembly will take effect on January 1, 2011.

The Law on the State Bank of Vietnam includes big changes, including the article 3 on national monetary policies and jurisdiction to decide national monetary
policies. In addition, the new law has an article stipulating capital contribution from the State Bank of Vietnam to special enterprises.

The amended Law on Credit Institutions includes 10 chapters with 163 articles.

Individuals, enterprises can Pay Tax through Internet, Mobile services, ATM
Under the Circular No 180 released by MOF guiding electronic transactions in tax payments, from January 1, 2011, tax payers can pay taxes through electronic
channels. They can make transactions at banks where they have accounts, through different channels (Internet, Mobile, ATM), or through the electronic portal of
taxation agencies.

Enterprises Print their Own Invoices

Under a newly promulgated decree dated May 14, 2010, from January 1, 2011, enterprises will must print invoices themselves instead of buying invoices from
taxation bodies. The decision is believed to make a breakthrough in the mind of enterprises. From now on, enterprises will issue their own invoices, and take
responsibility for issues related to their invoices. Meanwhile, enterprises no longer have to queue up to buy invoices from taxation agencies.

However, enterprises have complained that they are encountering difficulties implementing the new decision. On December 14, MOF allowed local tax agencies
to increase the volume of invoices to be sold to enterprises, saying that the volume would be enough for enterprises to use until March 31, 2011. It is understood
that the deadline for enterprises to use their own invoices has been delayed until the end of March instead of early 2011.

New Rules on Rice Export

From January 1, 2010, rice export companies must follow the Decree No 109 on rice export management. The companies must meet requirements of maintaining
at least one storage with the capacity of 5000 tons of rice at minimum, and having at least one rice husking workshop with the minimum capacity of 10 tons of rice
per hour.

New Principles for Import-Export

The international trade rule, Inconterms 2010, 8th version will take effect on January 1, 2011 and includes many amendments in accordance with the international
practice.

For example with Inconterms 2000, in FOB sale, sellers only took responsibility for exports until the goods reach the “ship rail”, while in Inconterm 2010, the
concept has been replaced with “On Board The Vessel”.

Car Imports will See Tariff Reductions

From January 1, 2011, the import tariff on cars sourced from ASEAN countries will decrease 13 percent under AFTA commitments.

From that time, import tariffs on vehicles that carry less than nine passengers that are sourced from ASEAN countries will reduce from 83 percent to 70 percent.

New Law Allows Quick Settling of Trade Disputes

The Trade Arbitration Law will take effect as of January 1, 2011 to replace the Arbitration Ordinance which has been valid since 2003.

The new law is believed to help create a new means that allows parties to quickly settle trade disputes. The law gives more power to arbitrators (they can collect
evidences and summon witnesses) and reduces the risk that arbitrators’ decision may be abrogated by the court.

The Minimum Wage will be 1.55 Million Dong

The minimum wage will be higher than the current level from January 1, 2011. The new minimum wage for foreign invested enterprises will be 1.55 million dong
per month, while the level for state-owned enterprises will be 830,000 dong.

Source: giaonhanvantai.vn

Analysts tip Asian property markets despite cooling measures

Asian governments have imposed a raft of measures
aimed at preventing their property markets from
taking off too quickly, but the region still offers
investors some of the most prospective real estate
globally, it is claimed.
Property prices in Asia have doubled in many cases
in the past two years. So after various measures to
take the heat out of markets, especially in China and
Hong Kong, it is almost inevitable that returns will
cool next year.
But beyond that, price growth should pick up once
again off the back of Asia's traditional attractions
for real estate investors; enviable economic growth,
a steady rise in currency values and importantly,
increasing urbanisation in several countries,
according to analysts who see prices rising again by
between 5 and 10% in 2012.
In the third quarter alone, investment jumped 53%
from the second quarter, a stark contrast to Europe,
where investment fell 6%. About 17% of Asia’s
total investment in the third quarter came from
outside the domestic markets, up from 14% in the
previous quarter.
However, with regulators increasingly clamping
down on property markets to prevent bubbles
forming, such as with tighter lending requirements
for property purchases, the 2011 investment climate
looks less certain.
But over the longer term, Asian markets offer less
uncertainty than the United States or Europe, which
will support the market, many analysts say. Beyond
next year, the economies of developed nations are
expected to grow only sluggishly in coming years
as they deal with the heavy debt loads built up
during the financial crisis.
One investor looking to lock into Asia's relatively
brighter prospects is British property firm
Grosvenor, which manages the estate of the Duke of
Westminster. ‘We’re gradually putting more capital
into the region,’ said the firm's chief executive,
Mark Preston.
One of the biggest long term Asian attractions for
property investors is the rapid pace of urbanisation
in many countries, which is also a significant
contributor to economic growth.
In China, for example, the urban population is
46.6% of the total 1.3 billion population, but is
expected to cross the 50% mark in the next few
years as between 13 million and 19 million people
migrate to cities each year.
Several countries have a growing workforce. In
India, for example, the workforce is expected to
expand by 270 million people in the next 20 years.
China’s working population is due to peak in 2015.
Source: propertywire.com

The US Investment in Vietnam and the Third Investment Wave

A view of Intel inauguration in High-tech Park of Ho Chi Minh
City in October 2010
VietNamNet Bridge – The US believes that
Vietnam is a good destination for its investors.
Experts are now talking about the third US
investment wave in Vietnam.
The last month of 2010 proves to be the busiest
for the US Ambassador to Vietnam Michael
Michalak, who is going to wrap up his term in
Vietnam.
After bidding farewell to the Prime Minister
Nguyen Tan Dung on December 13, he has been
attending a lot of farewell parties with different
ministries and government agencies before ending
the term of office, during which he witnessed a lot
of significant events.
The US Ambassador witnessed three most
important events relating to the US investment in
Vietnam, including the signing of the contract on
providing satellite, equipments for operation
station and providing satellite launching service
between the Vietnam Post and
Telecommunication Group (VNPT) and the US
Lockheed Martin Commercial Space Systems; the
signing of the contract on BOT power project
between Vietnamese Vinacomin Group and AES
in April 2010; and the inauguration ceremony of
the Intel’s factory at the HCM City High-tech
Park in October 2010.
Talking about the AES’ project, Mr, Michalak said
investment capital of $1.8 billion shows the AES’
long term commitments to the energy
development process in Vietnam. “Long term
commitments” are the words commonly seen in
most of the speeches of the US officials or
businessmen when talking about the investments
in Vietnam.
Since 1995, the two-way trade between Vietnam
and the US has increased by 33 times. In 2009, the
US became the biggest foreign investor in
Vietnam. In the same? year, the two way trade
reached $15.4 billion.
Even in the period of the global economic
recession in 2009, the US exports to Vietnam still
increased by 11 percent, while the country’s
exports to other ASEAN countries saw two-digit
decreases.
The new investment wave – what is it?
In April 2010, the Vietnam-US Business Forum
was established, aiming to push up the trade and
investment between Vietnam and the US, provide
information about the laws and regulations which
would have impacts on the business environment,
to the Government, and foster the third-party
cooperation, among the Ministry of Labour, War
Invalids and Social Affairs, the Vietnam Labour
Federation, and the Vietnam Chamber of
Commerce and Industry (VCCI).
Mr. Michalak said that the US diplomatic
delegation has defined the so called “the most
potential areas”. These are the areas where the US
companies have high competitiveness, including
telecommunication, information technology, oil
and gas exploration, power production, highway
building, environment technology and aviation.
“Our main challenge is to make US companies
understand that there are numberless business
opportunities awaiting them in Vietnam,” he said.
The US investors have agreed that there is third
US investment wave in Vietnam. Herb Cochran,
right time to cooperate in order to serve the
investment wave.
The first wave came in the period from 1995 to
2000. A lot of US companies have been very
successful and expanding their business in
Vietnam, including Cargill, Coca Cola, Pepsi,
Kimberly-Clark, Procter & Gamble, Chevron,
ConocoPhillips and ExxonMobil.
The second wave appeared after the Vietnam-US
Bilateral Trade Agreement which took effect in
December 2001. The open US market has become
the big consumer of Vietnamese products,
especially garment, footwear and interior
products. A lot of US companies have got
involved in the distribution of the products, thus
helping increase Vietnam’s exports to the US from
$1.1 billion in 2001 to $14.8 billion in 2010.
The third wave is considered as starting in
2006-2007 with the huge project of Intel in
Vietnam. In 2010, more than 20 US companies
that top the “Fortune 1000” list arrived in Vietnam
to assess business opportunities.
Mr. Herb Cochran said that the important factor in
the business strategy of companies is the concept
“China + 1”, or “China and India + 1”. Vietnam
was aware of the phenomenon in 2008, when it
began taking steps to prepare for the third
investment wave.
AmCham’s Chair Hank Tomlinson, at the
Vietnam Business Forum held recently,
emphasized that Vietnam needs to increase its
competitiveness in attracting foreign investment.
“High quality investments always go to the
countries which offer optimal conditions,” he
said.
He has called on the Government to cooperate
with investors to settle problems, and to ensure
that the business environment in Vietnam is
competitive compared to neighbouring countries.
Source: Vietnamnet

he believed that the 1200MW project and the huge Managing Director of AmCham, said that it is the

Inflation Hits 10% in Major Cities

Average CPI in 2010 is 0.95%/month
The consumer price index (CPI) in Hanoi and HCM
City for 2010 rose almost 10 per cent against last
year.
CPI in Hanoi increased 9.56 per cent over 2009,
fuelled by a rise of 1.83 per cent in December, said
the Hanoi Statistics Office.
In December, the price of food and catering services
rose the most by 3.27 per cent, while housing,
electricity, water, fuel and construction materials
rose by 2.86 per cent. In December, the price of textiles, garments, hats
and footwear surged 3.17 per cent compared to last
The cost of postal and telecommunications services
month.
remained unchanged, but most other commodities
like transport, footwear, hats, beverages and High demand
cigarettes, home equipment and appliances rose by
The increase was due to sudden high demand for the
1 per cent.
products in the cold weather, said the office. The
Economists attributed the CPI increase to the price of decorating services also rose by 1.51-4.6
surging prices of input materials and a high per cent in the build up to festival season.
USD/VND exchange rate, and also mentioned
Food and catering services this month increased by
growing demand in preparation for the traditional
2.37 per cent, the second time there has been a
new year festival.
month- on-month increase of more than 2 per cent
In December, the price of gold soared 5.4 per cent this year.
over November and 37.02 against the same period
Inclement weather, disease, high production costs
of last year. The price of the US dollar rose 3.44 per
and high gold and dollar prices were the main
cent from November and 7.44 per cent over
reasons for the increase in the cost of food and
December 2009.
catering services, the office said.
The CPI in HCM City jumped 9.58 per cent over
Source: Viet Nam News
2009, helped by a rise of 1.61 per cent in December,
according to the HCM City Statistics Office.

In 2011, middle-range apartment will be crowned

The real estate market in 2011 is expected to turn in
a positive direction and fair better than it did in
2010. The fastest Growth in market trend is also
average real estate and apartments.
2010 bleak
For high-end products (over VND 30 million/m2)
which are considered as segment of high-class
apartments in 2010, some have received much
attention while the others fall into bleak situation.
In respect of quantity and transaction rates, this
situation set the record lowest over previous years.
This high-end segment mainly concentrates in
central areas, close centers, East and South Saigon.
The middle-range apartment segment (over VND
22 million/m2) is now preferable to many investors.
The projects which have attracted the greatest
attention from buyers were located in District 7,
Binh Thanh, Tan Binh, Tan Phu and Binh Tan.
Purchasing power in this segment, nevertheless,
tends to considerably go down because of sharp
increases in supply. Consumers enjoy multiple
options and expect lower prices. That is the reason
why products for sale on the first stage only attract
investors.
The most popular segment (over VND 15
million/m2) remains strong in the primary and
secondary markets. VietRees sees its strong
development in the coming years. At present,
enterprises have shifted to popular apartment
investments in District 12, Binh Chanh, Binh Tan,
and Thu Duc.
encountered difficulties, particularly the business of
the high-end segment; even when products of this
segment are reduced to average rates.
Many projects sold only 30 - 40% due to decreasing
purchasing power and less attention of buyers to
high-end apartments. Customers are now more in
getting information and make more investments in
the middle-range segment. When correlatively
comparing projects, the project offering attractive
price as well as promising location will fair the best.
The findings of VietRees shows that customers
more and more pay attention to products that is
worth their money. They find many products and
make comparisons among them, and then compare
to other housing products; afterwards, based on the
purchasing capacity, they will make the final
decision.
Taking into account the income of ordinary home
buyers looking to purchase primary residences,
many projects currently on the market are still
priced higher than their actual value.
Prices will decrease in 2011
VietRees‘s survey of market trend in 2011 indicates
that the real estate channel of middle-range
apartments is considered as a safe investment
channel against channels of securities, gold, foreign
currency, and enterprise establishment
The market next year is expected to be more positive
and better than that in 2010. Demand for apartments
will sharply shift to areas far from the centers and
suburbs like Binh Duong, Dong Nai, Long An, etc.
transport connections to the center.
It will have another apartment discount however not
as much as the last one; or investors will not
increase selling price of apartments so as to attract
customers in 2011.
According to VietRees, the market will eventually
compete in price. The key problem is that investors
fail to sell their products while there is great
pressure for product sales since they will sufer from
big losses if they cannot sell the products. Price
reduction is one of compulsory options that many
investors must consider.
In 2011, it is predicted that real estate businesses
will start to develop middle-range apartments in
suburban areas and centre-distant areas. Apartments
priced at below VND 20million/m2 will attract
investment and become more popular. Apartments
with area of less than 60m2, 75m2, 90m2 priced
from VND 0.8-1.4 billion will have chance for good
sales.
Enterprises with financial insufficiency will silently
retire from the market, and the market will no
longer draw the attention of nonprofessional
businesses, except for the old amateur businesses
that have to launch projects or assign their projects.
VietRees also sees that more and more investors
realize if they want to sell their goods, their
products must be worth the money, or customers
find their products good, unique and suitable to
their tastes and demands.
Source: AFP

Apartment businesses in 2010 in HCMC have thanks to more convenient infrastructure as well as

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