Thursday, August 23, 2012
NYT on Vietnam Property Bubble
China isn't the only Asian country on the brink of a property bubble bursting. In the New York Times, Thomas Fuller reports In Vietnam, Growing Fears of an Economic Meltdown:In Vietnam’s major cities, a once-booming property market has come crashing down. Hundreds of abandoned construction sites are the most obvious signs of a sickly economy.
“I can say this is the same as the crisis in Thailand in 1997,” said Hua Ngoc Thuan, the vice chairman of the People’s Committee of Ho Chi Minh City, the city’s top executive body. “Property investors pushed the prices so high. They bought for speculation — not for use.”
The article describes a Vietnam that sounds similar in many ways to the US and other places: a real estate bubble fueled by overpromotion; a recession that has left land development projects uncompleted; a disproportionate impact on younger workers; hard times for certain sectors of the economy, while others are relatively unscathed. Of course with Vietnam having dived in to the global economy in the past generation, the American recession and the European debt crisis are also having effects in Vietnam. But it's still quite interesting that the trigger seems to be a real estate bubble.