Feb 6, 2012

Vietnam - Affordable housing expected to boom this year



The year 2012 has seen many real estate firms in HCM City turning attention to lowprice housing projects with small area.

"Cheap housing of medium area is our target this year", said Le Chi Hieu, Chair of Thu Duc Housing Development JSC. Currently, the prevailing price that range between 16 billion dong and 17 billion dong per square metre is anticipated to be further lowered. Such apartments are reckoned to be of great demand and more affordable than other products.

Similarly, Le Hung, general director of HAGL revealed intention to bring out newlybuilt low-cost apartments of small area after quarter two. Specifically, the apartment project on Luy Ban Bich Road, Tan Phu District is expected to come onto the market at 13 billion dong per square metre.

The two remainders that are located in District 7 are likely to be offered at 20 billion dong-22 billion dong per square metre, yet the total price does not exceed 1.5 billion dong.

Unlike other HAGL's products, the small area of which are 94 square meters, that of the new one will only be around 70 square metre with the price totalling roughly 800 million dong. Furthermore, buyers could borrow up to 70pct of the contract value.

Product differentiation would be the only way to make profit in the light of flat apartment market, according to Hung. Therefore, apartments should be of more competitive prices in comparison with tSTC in similar locations. Moreover, housing of small areas would make total prices more affordable to most of the potential customers in HCM City.

"If interest rates cool down, apartments of between 800 billion dong and 1.5 billion dong together with lending rate of 70pct of contract value would be saleable. HCM City's young population of stable income could afford 250 billion dong-300 billion dong for a house on instalment", Hung said.

In the meantime, Nguyen Phat Dat, Chair of Phat Dat Real Estate Development JSC, opted to develop Everich 3 project in District 7 of cheaper prices compared with similar current ones.

Presently, the Everich 1.2 is priced at between 25 billion dong and 35.5 billion dong per square metre. The newly-developed project will provide rough houses of more competitive prices than others in similar locations which enable buyers to their own interior decoration depending on financial capacity.

"Despite the market stagnancy, I believe affordable housing will be saleable. The period 2012-2013 would call for real estate firms' significant efforts to survive for the market to revive in 2014-2015", Dat reckoned.

Property firms' product restructuring is likely to breathe life into the market this year, according to Pham Van Hai, general director of ACB Real Estate JSC. While high-end apartment market is fairly flat due to market's capital thirst, low-cost housing of medium area could be a positive movement.

VietBiz24



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