Vietnam HCM home prices drop by 40% in 6 mths as interest rate soar to curb inflation

[touchring]

Want to know what happens when inflation gets out of control??



Vietnam builders halt projects to avoid bankruptcy

Tuesday, 20 May 2008
Accelerating inflation in Vietnam has caused builders to halt residential property projects that they no longer view as economically viable, reported a branch of the US financial services firm Morgan Stanley.

Vietnam's year-on-year inflation rate reached 21.4% last month, the highest since at least 1992, according to government figures.

Construction costs in Vietnam have risen as much as 40% since the end of 2007, Melissa Bon and Brian Wee of Morgan Stanley Asia (Singapore) Pte. said in a report.

"Some contractors are delaying construction work to avoid the risk of facing bankruptcy,'' Bon and Wee wrote in a report following a visit to HCM City.

"With costs of construction materials escalating, contractors have opted to forgo construction, break contracts, and instead accept fines.''

Residential property projects are also struggling to find financing in a tightened credit environment, the report said.

The International Monetary Fund said in March that tightened monetary conditions would be needed to slow Vietnamese credit growth that reached about 50% last year.

More: http://www.izproperty.com/index.php?...1471&Itemid=22

[GRG55]

Re: Vietnam HCM home prices drop by 40% in 6 mths as interest rate soar to curb infla

Want to know what happens when inflation gets out of control??



Vietnam builders halt projects to avoid bankruptcy

Tuesday, 20 May 2008
Accelerating inflation in Vietnam has caused builders to halt residential property projects that they no longer view as economically viable, reported a branch of the US financial services firm Morgan Stanley.

Vietnam's year-on-year inflation rate reached 21.4% last month, the highest since at least 1992, according to government figures.

Construction costs in Vietnam have risen as much as 40% since the end of 2007, Melissa Bon and Brian Wee of Morgan Stanley Asia (Singapore) Pte. said in a report.

"Some contractors are delaying construction work to avoid the risk of facing bankruptcy,'' Bon and Wee wrote in a report following a visit to HCM City.

"With costs of construction materials escalating, contractors have opted to forgo construction, break contracts, and instead accept fines.''

Residential property projects are also struggling to find financing in a tightened credit environment, the report said.

The International Monetary Fund said in March that tightened monetary conditions would be needed to slow Vietnamese credit growth that reached about 50% last year.

More: http://www.izproperty.com/index.php?...1471&Itemid=22

Thanks for posting touchring.

This adds to the reports the Arabian Gulf Central Banks are trying to restrict lending to their also overheated real estate markets.

Six months ago Vietnam was being touted as the "second fastest growing economy in the world". Now we can see how they did it.

...tightened monetary conditions would be needed to slow Vietnamese credit growth that reached about 50% last year...

..."Exceptionally high'' growth in company earnings in Vietnam last year was driven in part by "corporate speculation'' in the property market...

After the Berlin Wall fell and "globalization" really took off, capitalism was declared to be the "winner". Ironic that Vietnam, of all countries, has succumbed to it.

[touchring]

Re: Vietnam HCM home prices drop by 40% in 6 mths as interest rate soar to curb infla

Thanks for posting touchring.

This adds to the reports the Arabian Gulf Central Banks are trying to restrict lending to their also overheated real estate markets.

Six months ago Vietnam was being touted as the "second fastest growing economy in the world". Now we can see how they did it.

...tightened monetary conditions would be needed to slow Vietnamese credit growth that reached about 50% last year...

..."Exceptionally high'' growth in company earnings in Vietnam last year was driven in part by "corporate speculation'' in the property market...

After the Berlin Wall fell and "globalization" really took off, capitalism was declared to be the "winner". Ironic that Vietnam, of all countries, has succumbed to it.

The change in events in Vietnam is shocking to almost everyone even in Asia, banks in Singapore were aggressively promoting Vietnam stock funds for the whole of last year. But today, even the best performing vietnam fund will lose at least 40%, some maybe 60% as compared to a year ago.

Inflation in vietnam seems to be getting out of control, people are starting to dump the local currency. But with currency controls, they can only dump money for food and gold.