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VNRE - Although the real estate market in Hanoi has been warmed up by investors for the past time with information related to capital planning issues, high-class apartment segment has not been improved. A series of luxury and high-class apartments is falling into difficulties. Investors and distributors are competitively giving attractive offers.

A few years ago, when supplies of high-class apartment segmentation was not numerous available, it was the “hot” issue of the real estate market as people as well as investors in any way tried to own a high-class apartment. But for the time being, when most investors are focusing on building the high-class apartments, the supplies become increasingly redundant. The high-class apartment zones have thousands of flats to offer on the market creating pressure on sellers.

According to preliminary calculations, in the coming time, Hanoi will have about 14,000 to 15,000 high-class apartments launched; most of these projects are in the process of beginning construction or constructed. Particularly in 2011 there was about 10,000 units launched. In the central quarters, such as Hoan Kiem and Ba Dinh there were hardly new projects, but in the west of the city, concentrated in quarters, such as Cau Giay, Thanh Xuan, Ha Dong, Hai Ba Trung and Tu Liem, Hoai Duc districts there will appear thousands of high-class apartments offered for sale.

The information about high-class apartment to which real estate investors have paid most attention in recent time was that the Vincom published to have sold 3000 units of a total of 4,000 apartments in Royal City Project No. 74 Nguyen Trai (Thanh Xuan). Then it should be mentioned to the Golden Palace project invested by Mai Linh Investment Joint Stock Corporation in cooperation with MB Land with a scale of about 1,000 apartments. On March 15, 2011 investors of Splendora project started launching high-class apartment products priced at about 38-40 million per sq.M which can be paid in four rounds. The first payment costs 20 percent of the apartments’ value. The project covers about 500 high-class apartments.

Another Vincom’s project attracting the attention of the public is that Times City project (Hai Ba Trung) with the scale of 364.500sq.m divided into several different functional areas to create a sufficent infrastructure and living, but that the prices ranges from 30 to 36 million per sq.m also makes many investors be cautious. To generate demand forces for project, many secondary investors were willing to sell them at original price plus a discount from one to five percent.

Located in a favourable position in the west of the city, Mandarin Garden project by Vietnam Golden Gain Co., Ltd is built at land lot N03 in Southeast urban area, Tran Duy Hung Street. The scale of this project is also up to 1,000 high-class apartments. Its investors are prepared to launch their products to the market in the first phase of the project, but the number of apartments and prices has yet to be announced.

According to research reports about the housing market in Hanoi just released by the Colliers International company, the supply of luxury apartments increased four times this year. In the first quarter in 2011there had appeared new projects creating more options for buyers and investors, and the competitiveness will become increasingly more intense in this market segment.

According to the Collier’s forecast, the amount of apartments offered for sale on the market in 2011 is very large. Meanwhile, the economic outlook is not bright due to tight credit policy of the Government has great impact on the real estate market, restrict lending and high lending interest. The rate of successful transactions of high-class apartment projects is very low. So, the competition is more severe in 2011 leading to lower rates of sale or to reduce in selling prices for apartments.

Mr Nguyen Do Viet, Deputy General Director of Thang Long-Song Da company:

Although high-class apartment markets are falling into a quiet situation, investors have to keep high prices or even raise prices due to high input costs, such as construction materials, especially steel, cement, bricks, labor forces to offset the inflation. "To balance, many investors will have to accept the draw sale or loss" Mr Viet emphasised.

However, that many enterprises rush into investment in building projects or expensive apartments because of ill management of cash flow or taking money of this project to buy land for other projects makes a series of projects get breathless, and there appear stagnant signs of flats.

Mr Nguyen Tran Nam, Deputy Minister of Construction:

In Ho Chi Minh city, the high-class apartment has been saturated leading to reduced transaction greatly reduced prices. In Hanoi, the high-class apartment prices remained high. Thus, in the longer coming time, it cannot avoid the same situations as in Ho Chi Minh City. One difficult point for businesses when falling down in the situation of having to invest in high-class apartments is most projects are located in favourable positions and city centers that they can not make cheap products.

Mr Vu Xuan Thien, Deputy Director of Housing Management and Real Estate Market Department, Ministry of Construction:

High-class housing in Hanoi is redundant in supplies. Since the New Year of 2011, according to information from a number of enterprises, many products have been launched, but successful sales rate is not high, especially high-class projects with the price over US$1,800.

Reported by Luong Tuan | Vcci News

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