Real estate market woes to persist for foreseeable future: construction minister

The real estate market will continue to face difficulties due to limited supply and tightened credit, says Minister of Construction Nguyen Thanh Nghi.

Supply is limited while demand for low-end housing is enormous, Nghi said during a Q&A section Thursday at the ongoing National Assembly session.

"Housing prices are much higher than what people can afford. The control of cash inflows into the real estate sector is not tight, leading to many risks. Long and medium-term supply is not available," he said.

Speculation remains pervasive, while there remains a lack of transparency because the relevant information system is yet to be updated, Nghi added.

The minister noted that the real estate market experienced pronounced difficulties in the third quarter due to credit restrictions.

But central bank Governor Nguyen Thi Hong argued that bank credit was only one source of capital. "Capital should also come from direct investment, the stock market, corporate bonds, companies' equity, and people," she said.

She affirmed that the current policy prioritized credit for low-end housing development and ensuring the stability of macroeconomy and the safety of the banking system.

Nguyen Huu Thong, a National Assembly delegate representing Binh Thuan province, said the real estate market was not controlled well and has not closely followed the government's housing strategy.

"Cash flows mainly come to real estate for the rich, while poor people have not recieved adequate attention," he said.