Property developers in Hanoi and Ho Chi Minh City have slashed apartment
prices by up to one third in the hope of recouping investment to battle the
current financial problems.
A unit at Westa Apartment
Building under construction in the capital’s Ha Dong District costs VND16-17.9
million (US$768-859) per square meter at the moment, 30 percent lower than one
year ago, according to new quotations announced by local trading floors.
A trading floor which sells many
apartments of another project in Ha Dong says it is offering a wide range of
discounts to buyers.
“Purchasers can pay VND20-100
million ($960-4,800) less for an apartment now,” one of its agents says.
Speculators, who buy properties
from developers to resell them for profit, already took around VND2 million
($96) off the original unit price at Tan Viet, a housing development in Hoai
Duc District, closing it at VND12-13 million ($576-624) per square meter.
In Ho Chi Minh City, apartment
prices also plummet as trading floors and resellers have joined a markdown race
to lure customers.
Units at Bay Hien Tower in Tan
Binh District are currently 33 percent cheaper than a year back as its
developer Long Hung Phat now offers VND16 million ($768) per square meter.
Dealers Dai Tin A Chau and An
Binh Land demand VND18.2 million ($873) per square meter, a 30 percent cut, for
120 units they bought at Hoang Anh River View in District 2 while Nhip Cau Dia
Oc which purchased wholesale a number of apartments at Carina Plaza in District
8 is selling them at VND13.2 million ($633) a square meter, down 15 percent
from March.
Developers of several other
projects in Go Vap, Tan Binh, and Nha Be also cut their prices by 5 to 12
percent.
Cutting losses
Sellers say they have to decrease
prices to cut losses and recover investment because they can no longer wait for
a market comeback.
“Cutting prices will help us
recoup investment as waiting for a market recovery appears to bring no future,”
Pham Xuan Ai, An Binh Land director explained. “We need money to do other
business.”
Nguyen Ta Phuc, Long Hung Phat
director, said it is impossible to maintain the old high prices when the real
estate market is in deep recession at the present time.
Pham Ngoc Lam, board chairman of
another company, admitted recouping investment is a priority to many businesses
given current financial difficulties.
The director of a major property
firm in Ho Chi Minh City said a wrong pricing policy would lead to a capital
shortage as bank loans are inaccessible to businesses now.
So developers now focus on the
completion of each project to quickly get back what they have invested instead
of trying to build as many at the same time as possible like previous years,
board chairman Lam added.
“End-users will benefit as the
economic slowdown is forcing developers to offer a ‘true’ price for their
products,” an expert said.
TUOI TRE
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