Housing speculation rampant in Vietnam: official

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Speculative trading is widespread in the real estate sector and it's necessary to ensure bank credit is not just benefiting speculators, Minister of Construction Nguyen Hong Quan said.

The market is facing many problems, with prices staying high and speculative activities hard to control, Quan said at a meeting of the Vietnam National Real Estate Association in Hanoi Saturday.

"Capital is a long-term issue for the real estate market. I think we have to manage capital flows to balance funding for both the demand and supply sides and restrict lending to speculators," he said.

According to a report released by the National Real Estate Association, Vietnam's property market is still in its infancy and thus there is a large gap between supply and demand. While many apartment projects are left unoccupied, a large number of working families cannot afford to buy a home.

In addition, the market has not been accompanied by a strong financial system, heavily depending on bank loans and monetary policies, the association added.

Analysts have said the property market is caught in a downturn this year due to difficult macroeconomic environment. The government's restrictions on bank loans to non-manufacturing sectors also made it hard for developers and home buyers to raise funds

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