Real estate transactions will "explode"?

The real estate market is experiencing "underground" waves of transactions in some projects with prime locations and good prices.

That is the general and quite optimistic assessment of real estate brokers when evaluating the real estate market in Ho Chi Minh City in the second and third quarters of 2012. However, according to them, transactions will explode locally in some real estate market segments and certain projects, and will no longer be hot in the whole market as before.

Prices down, supply up

According to a survey by Colliers International, the selling price of luxury apartments in Ho Chi Minh City in the first quarter of 2012 decreased the most, about 40%, while the price of mid- and low-end apartments decreased about 27% - 30% compared to 2011.

If only counting the first quarter of 2012, the average decrease is about 6% compared to the previous quarter, but there are projects that have just announced re-offerings with a decrease of up to 30% compared to the previous offering. Most of the transactions are in the mid-range and affordable apartment segment with a price range of about 11-22 million VND/m2...

According to the latest report of Savills Company, the market seems to be more difficult when the demand of all product lines has decreased. The supply has also decreased significantly for both serviced apartments and apartments for sale. In the past 90 days, only 300 apartments of 2 projects were put on the market, down 12% compared to the previous quarter and 30% compared to the same period last year.

The number of apartments sold decreased by 12% compared to the same period in the first quarter of 2011. Affordable project apartments are the main products traded in the market. Price is the factor that influences home buyers. In general, in terms of successful transaction prices, all apartment segments have decreased significantly compared to before, such as class B apartments have decreased by 21%...

Mid-priced apartment projects are attracting many customers to buy to live.
Photo: Tan Thanh

Although apartment prices are falling and transactions are sluggish, supply is showing signs of increasing sharply. Currently, the number of apartments for sale on the market is estimated at about 119,000, up 37% over the same period last year.

In the first quarter of 2012 alone, there were about 2,000 new apartments offered for sale on the market. Furthermore, according to forecasts from a number of market research units, in the 2012-2015 period, Ho Chi Minh City will receive a new supply of about 45,000 apartments from more than 90 projects, mainly in Nha Be, Binh Chanh districts, districts 2, 7 and 9, accounting for 65% of the market share.

Many "underground" waves

Reported figures show that the real estate market is full of products, while the purchasing power of customers is low. However, that is only the surface because in reality, there are many "underground" waves in transactions in some projects with prime locations and good prices. Many real estate brokers said that the land project in District 9 is currently one of the hot spots for competition for market share among real estate brokerage units.

Currently, there are no less than 10 real estate trading floors accepting reservations for customers with an advance payment of no less than 15 billion VND. Accordingly, when customers make a reservation from 20 million VND to 50 million VND, they will receive a corresponding right to buy a product from the investor. In case they do not buy or cannot buy, the customer will receive the deposit back plus bank interest for the amount paid to the brokerage unit...

A mid-priced apartment project in Tan Phu District, Ho Chi Minh City is currently attracting special attention from many customers after the investor launched a strategy of reducing the selling price, handing over the house immediately, and not charging interest for 2 years for the amount equivalent to 50% of the house value that can be paid in installments. Thanks to these policies, in just one month, the project has sold over 80 apartments. Previously, the An Tien project in Nha Be District, due to a 30% price reduction, sold out nearly 500 apartments in one month.

Mr. Su Ngoc Khuong, Director of Savills Investment Department, said that depending on the strategy of each enterprise, the selling price of products has different levels of reduction, which can be lower than the market price or lower than the investment cost. However, price reduction is one of the channels chosen by enterprises to recover capital and consume goods during the current slow market trading period.

According to Nguoilaodong