Apartments are hard to sell, land prices jump after Carina apartment fire
The fact that customers are more demanding in choosing apartments to buy has made it difficult for investors to launch products during this time. Many businesses admit that the market is showing signs of slowing down.
Many believe that the market decline is largely due to the impact of the Carina Plaza apartment fire that killed 13 people and injured dozens last month. In the short term, the apartment market will decline due to this anxiety.
Customer requested to see fire protection design
Mr. Nguyen Minh Khang, General Director of LDG Company, said: “The market has had certain reactions after the Carina Plaza apartment fire. Sales consulting is much more difficult. The business situation of enterprises has decreased by about 20% compared to before."
Although Mr. Khang believes this is just a temporary reaction, he says that customers' reactions will make real estate investment businesses pay more attention to construction quality.
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| Apartment buyers are no longer as easy-going as before, but are more demanding of construction quality. Photo:Le Quan. |
Sharing the same opinion, Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), also said that the apartment market has seen slow liquidity in the past 10 days. Consumers are confused, so they are very picky when choosing to buy an apartment.
“Perhaps the market needs more time to return to its previous growth trajectory. The first thing investors need to do is improve their products to regain customer confidence. We hope product quality will improve after the recent disaster,” said Mr. Chau.
Mr. Nguyen Anh Tu, a sales staff at Dat Xanh Real Estate Trading Floor (Thu Duc), said that it seems that all customers are more careful and demanding. The sales staff "lost their ears" introducing a product.
“It is very difficult to convince customers now because their requirements are very high. In the past, when choosing to buy an apartment, customers were first interested in price and amenities, but now they also want to see the fire protection system design. The strict requirements of customers make the consultation time of sales staff many times longer. The time to decide to pay for the product is also longer. For the past two weeks, our sales have been very slow and difficult,” Mr. Tu shared.
Mr. Tran Quoc Dung, Deputy General Director of Hung Thinh Corporation, commented that the change in homebuyer behavior forced investors to flexibly change their marketing and sales methods. The Carina apartment fire left an expensive lesson for apartment project investors. Currently, to sell products, investors will have to make major changes in investment.
“The fire is a warning bell for real estate businesses to review all their projects and improve the quality of their construction. In the past, customers did not pay much attention to fire safety certificates when receiving apartments, but now they have to ask investors to ensure they are fully insured. Homebuyers need to exercise their rights,” said Mr. Dung.
Land and townhouses "fishing in troubled waters"
At the fire prevention conference in apartment buildings organized by HoREA on April 4, Mr. Le Hoang Chau warned that the market has seen the appearance of speculators, land brokers, and brokers taking advantage of the apartment fire to speculate and inflate the price of subdivided land. This is for personal gain, buyers must be vigilant and objective.
As a person in need of housing, from the beginning of the year, Mr. Ngoc Van (living in District 9, Ho Chi Minh City) had researched many apartment projects to buy. However, after the Carina apartment fire, he changed his mind and looked for a townhouse to buy.
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| Land and townhouses have the opportunity to increase in price. Photo:Le Quan. |
According to a survey, the land price in District 9, Ho Chi Minh City has been inflated quite high by real estate brokers for about a week now. Some land projects under construction and without ownership certificates (red books) located on Tam Da Street, District 9, were offered at 16.5 million VND/m2 a week ago, but have now been pushed up to 18.5 to 19 million VND/m2.
Some projects on Nguyen Duy Trinh Street, District 9, which already have red books, were offered at 25 million VND/m2 in mid-March, but are now being pushed up to 30-33 million VND/m2.
Explaining the sharp increase in land prices in District 9 over the past week, a broker from a land company here said that many people have given up on buying apartments and are looking to buy land to build houses. The number of people looking to buy land has increased, so prices have also increased.
Besides, since the city government tightened the subdivision and separation of plots, newly subdivided land is now very scarce. Supply cannot meet demand, so prices are high, especially for projects that already have pink books.
CBRE Vietnam’s first quarter real estate market overview report said that the secondary market price (investors buying and reselling) of townhouses in Ho Chi Minh City projects has increased sharply in recent times. Specifically, villa prices increased by 35% quarter-on-quarter and 37% year-on-year. Townhouse prices increased by 21% quarter-on-quarter and 35% year-on-year.
Most notably, shophouses (commercial townhouses or ground-floor apartments in projects) have seen the strongest fluctuations. This asset group has increased in price by 59% quarter-on-quarter and skyrocketed by 261% year-on-year in the secondary market. It is clear that cash flow is showing signs of shifting to land and commercial townhouses.
