Officials question housing inventory surge

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New statistics show that real estate inventory rose sharply over the first quarter despite a lag in new projects, but officials suggest that last year's stats may have ignored unfinished units while this year's included all planned housing.

By the end of March, the total number of unsold housing units in Vietnam was 20 percent higher that than the ministry recorded at the end of last year. That is a total of 33,850 available units, according to figures released by the Construction Ministry at a conference May 9.

The increase has confused analysts as very few new property projects were completed during the time period. In March, Hanoi city authorities even placed a yearlong moratorium on new housing projects.

Vu Xuan Thien, deputy head of the ministry's housing and property market management unit, said last year's statistics did not reflect the true depth of the despair the beleaguered market finds itself in.

The empty units figures could have been "much higher," he said.

The end-2012 statistics did not include a number of property projects that are under development but not yet completed, he said, stopping short of confirming that this year's statistics were measured differently.

Thien said local governments would be rechecking the inventory and he expected new statistics to come to light.

Nguyen Mai, chairman of the Vietnam Association of Foreign Invested Enterprises, also said the numbers were inconsistent and suggested that an inventory classification system based on phases of construction be established.

In related news, authorities have given permission to developers in HCMC and Hanoi to convert 31,000 commercial apartments into social housing since the Construction Ministry allowed the conversions in March.

The ministry wants to boost the purchase of low-cost apartments, for which there is massive demand, in order to unfreeze the real estate market. Analysts blame developers for creating the property market mess by focusing only on the high-end segment, where there is little or no demand, and ignoring affordable housing, where the country's greatest real estate demand is.

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