» » When developers adjust for new selling approach

Selling new apartments in HCMC has become more difficult in the sluggish local property market. Gone are the days when buyers and individual investors hustled up in the early morning to deposit thousands of dollars. These days, developers woo customers by offering money when they buy apartments.

Richland Hill, an office and apartment building complex project in HCMC’s District 9, is just weeks old. To draw attention, project investor Hiep Phu Gia in partnership with Dong A Bank, is launching a promotion which not only gives homebuyers financial support but gives them a savings account worth 5% of the first 30% deposit for an apartment.

For example, anyone who buys an apartment worth VND1.8 billion gets VND27.5 million among VND550 million, 30% of the deposit. The savings account in the bank will accumulate without interest for years, and it will mount up to equal the deposit after 20 years.

The company does even better for customers who deposit 50% of the apartment value. A 10% interest rate per year will be applied and accumulate by years. Homebuyers who visit model apartments will be given a draft calculation that their savings amount plus interest will shorten the time of investment return they pour into the project.

However, at a time when people are tightening their purse strings, whether the promotions lure a large number of customers remains to be seen. Richland Hill has 1,000 luxury apartments designed in New York style. The project is scheduled to be completed by 2011.

Before Richland Hill, Sacomreal used financial support as bait to lure homebuyers to its Phu Loi 1 project in HCMC’s District 8. The promotion came at a time when customers found it hard to borrow due to the credit tightening policy. Besides a loan and a favorable interest rate offered, the company gave a 5% discount to buyers who bought apartments with their own money.

Dat Lanh Real Estate Company does not use financial support to attract customers. The company has tailored apartment space to fit homebuyers’ budget, instead. Nguyen Van Duc, vice general manager of the company, said his ongoing project would have 700 apartments, 30 square meters each. Duc believed the smaller apartment as a starter house would meet the demand of young families, as well as help his company survive.

After a time of chasing profits, investors and homebuyers have shown indifference to the property market despite falling prices. One reason is that they find it hard to access bank loans. Though it is said that borrowing was easier, it was true only for projects sponsored by banks. Otherwise, banks require mortgages for the loans. Most project investors have to attach their projects to certain banks to support buyers if they do not want to see their projects stand still for having no money.

Bui Tan Tai, executive vice president of Asia Commercial Bank (ACB), said the bank has set aside VND2,000 billion for individual loans, including house loans. However, not many people have accessed the loans due to high interest rates.

“Many wait for lower interest rates, and regardless of the frozen market homebuyers see that prices have yet to hit bottom so they continue to wait and see,” Tai said.

By Dinh Dung - The Saigon Times

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