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Home prices dip alongside interest cuts, cheap materials
Interest rate cuts and cheaper construction material costs have pushed down housing prices in Ho Chi Minh City, said a senior executive at a property company.
Some developers have reduced apartment prices by 40-50 percent from last year as construction material prices have fallen to a three-year low, said Luong Tri Thin, general director of property firm Dat Xanh.
He also said builders could now borrow easier from banks, enabling them to complete projects at lower initial costs.
Efforts to stimulate the economy have seen the central bank slash the key rate from 8.5 percent to 7 percent, allowing commercial banks to charge interest on dong loans up to 50 percent above the benchmark rate, which is now only 10.5 percent a year.
Dat Xanh plans to offer 224 apartments in the SunView Apartment building in HCMC’s Thu Duc District at the price of US$764 per square meter, a drop of more than $500 a square meter from last year.
According to the HCMC-based firm, 60 percent of its customers wanted to pay no more than VND1 billion ($57,200) for a full apartment while only 10 percent were in the market for apartments at $1,500 per square meter or more.
Property firm Vinh Tuong has begun selling apartments in Block 3 of the Tan Tao Building in Binh Tan District at some VND9 million ($515) per square meter. Each 70-120 square meter apartment has two bedrooms.
Apartments in Nam Long Company’s Ehome Building in District 9, which is under construction and scheduled to open by September, are on sale for VND11.5-14.5 million ($671-847) per square meter.
Apartments larger than 50 square meters at the 17-storey Sunshine Building under construction in Thu Duc District are expected to be sold for only VND500-VND600 million ($29,197-35,036).
HAGL Land cut prices for its new Hoang Anh River View apartments in District 2 by 40 percent to US$1,350 per square meter last week.
It has also lowered prices at another project in Nha Be District to $1,250 from $1,800 per square meter.
Le Hung, director of HAGL Land, said the price cuts would “revolutionize” the HCMC property market in line with government efforts to stimulate the economy.
In Hanoi, medium and low-income apartments are selling for a whopping VND25 million per square meter, said Le Xuan Truong at property firm B.D.S Co.
Thin told Thanh Nien that property firms didn’t expect profits this year to look anything like they did in 2007, when prices and sales went through the roof.
But 2009 is set to beat dreary 2008.
“Their earning growth target is 20- 30 percent this year,” said Thin.
In another boon to the local property market, several banks have recently begun offering loans for house and apartment purchases.
Western Bank is lending a maximum of VND1 billion to potential homebuyers at interest rates of between 10.5-13.2 percent a year for the first three months.
Tien Phong Bank is offering 15-year mortgages worth 70 percent of the house value at 10 percent interest.
Vietnam Export-Import Commercial Joint Stock Bank, or Eximbank, Asia Commercial Bank and Sacombank are also offering housing loans.
Thanh Nien
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