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Real estate developers’ money now flowing to low-cost projects
Real estate developers are drawing up plans to make investments in apartment projects which have sale prices fit to medium-income earners, which is considered a wise move.
Though commercial banks have resumed loaning to the real estate sector with soft interest rates, experts have pointed out that real estate developers will not be able to revive the market with only bank loans. Commercial banks are believed to provide loans only to the investors who commit to complete projects soon and have good sales plans.
Therefore, real estate developers all have to build up suitable investment strategies that fit new circumstances.
Truong Thai Son, Deputy General Director of Hoang Quan Real Estate Corporation, said that in order to rescue themselves, real estate firms need to reduce production costs, diversify products and apply new technologies, which help make products with the quality acceptable for medium-sale prices.
Nguyen Hiep, Chairman of the Hanoi Urban Area and Housing Development Corporation (HUD) also said that investors should now focus on medium-grade apartments, affordable by those who have a real demand for accommodation.
After three years of making investments in medium-grade houses, HUD has realized that this is a very potential and attractive segment of the market. HUD plans to continue developing low-cost projects in new urban areas.
Nguyen Truong Tien, Deputy General Director of the Hanoi Construction Corporation, said that previously, investors rushed to build high-grade houses, the market segment which serves only 10% of Vietnamese population. Meanwhile, in new conditions, investors should target the majority of customers, and bring apartments to those who really have demand for accommodations.
A lot of investors have marketed products with reasonable sale prices. Megastar Dominium Hoa Binh Park (Megastar Dominium HBP), invested by Megastar Land, a member of Megastar Group, is an example. The 25-storey project, located near the big Pham Van Dong Road, includes 336 high-quality apartments with areas of 76, 78, 88 and 92 sq m(with 2-3 bedrooms), has sale prices between VND16 million and VND19 million per sq m.
Nguyen Chi Hieu, Managing Director of Megastar Land, said that with these sale prices, Megastar Dominium HBP still can ensure its high quality, while targeting small families with few members
VietRees, a real estate consultancy firm, said that the tendency of developing low-cost apartment projects has become clearer recently.
VietRees’ Analysis Director said that low-cost projects are able to be sold quickly, thus allowing investors to get back capital quickly.
Experts have also pointed out that low-cost projects, not luxury products, will help revive the real estate market.
VietNamNet, TBKTVN
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