Property investors and experts, speaking at a recent international real estate conference at New World Hotel in downtown HCMC for a panel discussion and experience sharing, said they were pinning hopes on the mid-range apartment market segment.
Many project owners and investors have found it hard to seek funds for their apartment projects due to the bank credit tightening, which has hit the real estate market. Meanwhile, experts look optimistic, saying there is a strong demand among mid-income people who are in need of apartments.
Experts said increased risk and decreased selling prices were discouraging speculators who at a certain time dominated some 60% of real estate transactions, and that they saw potential in the middle class market in the years to come if property developers knew how to tailor their products to meet the demand.
Brett Ashton, managing director of Savills Vietnam Co., shared his experience with investors at the conference. He said that thanks to young population, aging under 35, HCMC was emerging as a promising market for real estate investors.
He noted the property market has seen a fall in prices of high end apartments but people could not still afford to buy due to tight credit. A small drop in mid-end ones is good for investors to take the middle class segment into consideration, he said.
Therefore, an apartment costing around US$80,000 to US$150,000 each is within the reach of many young families who need a smaller size apartment as a starter home, he said.
Like other experts who foresee potential in accommodation among new and young families, Ashton gave investors an outlook about the local property market, citing the figures of the HCMC Statistics Office saying that the city's population was forecast to reach 10 million by 2010 and 16-17 million by 2025, and that the city last year saw some 49,000 couples getting married, who traditionally live with their families but would search for their own homes for privacy and independence.
He added another chance would come to investors from the emerging middle class, white-color workers with rising income, and that once a white-color couple with dual income around US$35,000 to US$50,000 per year, such an apartment would be obtainable.
Ashton, however, said that developers think about their project location that was suitable for local buyers, not for foreigners, and it could be anywhere such as districts 2, 7, 5, 10, Binh Thanh, Go Vap but the central business districts.
He noted the increased transportation infrastructure was effecting on new residential developments, new urban areas, travel times and safety, making location less important than price.
Source: Saigon Times