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Developers try to revive apartment sales
Real estate investors are racing to introduce promotions and discount programmes to spur the sluggish apartment sector in the country's southern economic hub.
In HCM City alone, more than 50,000 newly-built and old apartments remain unsold.
The sluggish sales are attributed by real estate experts to large housing supply and excessive prices.
As a result, wise investors need to reduce prices to sell large volume of unsold apartments so as to retrieve their capital investment to re-invest in other projects.
The southern real estate market is also suffering from capital investment divestment of northern investors who account for 50 per cent of the southern real estate market.
In the north, especially Ha Noi, prices have skyrocketed luring northern investors to withdraw their investment capital from the south.
Some said land prices would increase, combined with rising costs of input for construction.
Nguyen Minh Thanh, Director of An Cu Lac Nghiep Joint Stock Company, said predictions were accurate. Some unsold projects had failed to attract consumers. Prices of these projects would have to drop. In addition, investors could not afford to continue projects due to financial shortages. Investors must cut apartment prices to retrieve their investment capital.
Thanh predicted that some projects would see prices increase particularly if they had beneficial transport links, high profitability, or were of high demand from the market.
Thanh's company alone intends to raise apartment prices to VND2 million (US$96) per square metre.
However, new emerging markets with large amounts of available land such as Dong Nai, Ba Ria-Vung Tau, Binh Duong and Long An provinces will not suffer from this pressure thanks to low levels of investment, high incremental capital-output ratio (ICOR), and good planning. They have become favourite destinations for investors.
For instance, 130 JSC Aroma apartments in Binh Duong new city sold out at VND28 million ($1,346) to VND30 million ($1,442) per square metre early this year.
According to unofficial information, powerful investors will continue to offer 500 land lots in neighbouring projects in Binh Duong new city.
Pham Thanh Hung, Deputy Director of Century Real Estate Joint Stock Company, told Viet Nam News that housing prices would rise from now to the end of this year due to high inflationary pressure and exchange rate fluctuations.
vietnamnet, VNS
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