|
Apartment projects face obstacles to investment
High interest rates, land prices and construction costs were weighing against investment in apartment projects, prompting a warning of caution from property investment analysts.
The apartment market had undergone complicated changes as it recovering from the economic crisis, with higher material prices creating upward pressure on prices, the analysts said.
But the number of buyers willing to raise loans and take the risk of buying an apartment had reduced, plus there was competition in the market for sales, with demand being soaked up by hundreds of new housing and urban area projects, including low-income schemes.
It was now more difficult to sell apartments at higher prices to cover the increasing construction costs, the analysts said.
Colliers International Ha Noi's Price Study and Valuation Department head Nathan Cumberlidge said apartment prices needed to increase as costs increased for the projects to remain viable.
Viet Nam Steel Association statistics showed building steel prices rose 10 per cent last month.
Association Chairman Pham Chi Cuong said the rise was the result of increasing prices in steel embryo, electricity and petrol. It was also influenced by exchange rates.
Prices of brick and cement were also expected to rise.
Song Da Joint Stock Company, which is an investor in Van Khe Urban Area in Ha Dong District, had increased their apartment prices by 12 per cent. Apartments in the Mo Lao Urban Area would also be higher priced than previously announced. However, apartment prices in some new urban areas including Trung Hoa Nhan Chinh, Nam Trung Yen and Van Quan in Ha Noi remained unchanged because of low demand.
Nam Cuong Group has 116 apartments for sale in the CT3 tenement building in Hoang Quoc Viet Residential Area but the number of buyers was described as "modest".
Thu Duc Housing Development Joint Stock Company Ggeneral Director Le Chi Hieu said it had been unable to increase apartment prices because of the new projects coming on line.
Real estate firms said investors were turning to land lots instead of apartments, but even then there was need for caution.
On Hanhudland Estate Trading Floor, people were buying land lots in the West of the city, including Van Canh, Cau Dien and Nam An Khanh. Prices ranging from VND22-30.5 million ($1,180-1,600) a square metre.
Prices of land lots in Lang-Hoa Lac had also increased after a "quiet" spell with prices of VND38-40 million ($2,054-2,162) a square metre.
However, analysts warned that many land lots had been in a period of land clearance for some time.
Analysts said it was difficult to see high growth in the apartment market in the near future as interest rates of 18-20 per cent were causing project investors to hesitate.
Cumberlidge said the housing market would be subject to "unstable demand" with more caution over borrowing.
Head of the Ministry of Construction's House Management and Real Estate Market Department Nguyen Manh Ha said businesses and individuals should be cautious when investing in projects.
vietnamnews
|
