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HCMC: Oversupply creates ‘indigestion’ in high-grade apartment market
A lot of high-grade apartments have been marketed in recent days with attractive preferences, but sales continue to be slow.
It seemed that 2009 would be the right time for investors to market luxury products, which explains why a lot of new products have been launched onto the market recently.
However, since the products have been marketed in a gloomy period, investors have had to offer attractive preferences to buyers.
Real estate developers have offered to sell apartments at base prices, advertising that they are located in advantageous positions with good infrastructure conditions. Moreover, they accept flexible payment methods, while buyers can get long-term (15-20 year) loans worth 70-90 percent of the values of apartments under a cooperation programme between the real estate developers and commercial banks.
In late June 2009, Dat Xanh and Vo Dinh, the investors of Babylon Residence project in Thu Duc district, announced a 3 percent discount would be given for the first 100 buyers. Moreover, they also have opportunities to win other valuable prizes.
Thu Duc House has also launched a promotion programme to boost the sales of apartments of TDH-Truong Tho project in Thu Duc district. It has promised the special prize of a Toyota Fortuner worth 740 million dong to a lucky buyer.
However, despite the big and noisy promotion campaigns, project investors still cannot lure many buyers because of oversupply.
According to CB Richard Ellis Vietnam (CBRE), in the third quarter of 2009 alone, six apartment projects were completed which can provide 1,107 apartments.
The apartments (60-80 square metres) are offered at the average prices of $650-810 per square metre. However, very few successful transactions of high-grade apartments have been reported, while more transactions have been carried out in the medium-priced market segment.
According to Analysis and Consultancy Director Rudolf Hever of CBRE, though the market of high-grade apartments is gloomy, the sale prices of the apartments have not decreased at all. The prices of the apartments in the projects completed in 2009 have even increased by 10 percent.
He said that the investors have not reduced sale prices, but having been trying to boost sales by accepting payment over a longer period and pushing up advertisement for products.
However, these activities have not been able to attract buyers as well as they expected. The most important factor now in boosting sales is reasonable sale prices.
Agreeing with him, General Director of ACB Real Estate Pham Van Hai said that the prices of high-grade apartments remain very high, though the prices have been lowered.
Hai said that the majority of clients who seek to purchase apartments now are ones who have real demand for accommodation, not speculators. Meanwhile, with the unit price of $1,300-2,000 per square metre, an apartment would be valued at 3-4 billion dong, unaffordable for many buyers.
Chairman of Vinaland Tran Minh Hoang said that high-grade apartments remain unsalable because the national economy is still in difficulties, while the cash flow into the real estate market is weak.
vietnamnet, dt
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