Year- End Real Estate Market: Pressure for Big Rebates

VNRE - Vietnam real estate market has stepped into the final days in 2011. People’s lack of knowledge about the market has made it gloomier than ever.

Popular apartments to burst

While the medium and high quality department segments mostly stand still in the Vietnam real estate market even as investors have carried out promotion and discount programmes, the average quality apartment segment has attracted lots of interest. In mid November, according to the Northern Dat Xanh Services and Land Joint-stock Company, 75 of the total 90 flats of Dream Town Department (Tay Mo commune, Tu Liem district) with the price of VND17.8 million per sq.m have been sold in the first sale offering. Earlier, this secondary company was also successful in understanding the real demand of people, applying acceptable prices for Tan Viet project (Duc Thuong commune, Hoai Duc district), or Nam Do Complex project (in Truong Dinh street). With the price of around VND 15 million per sq.m, after a month, two major dealers have mostly sold out 150 flats of Tan Viet department, which was carried out by project owners.

In fact, customer demand currently concentrates strongly on segment of popular quality department with the price of around VND 14 - 22 million per sq.m. This definition becomes clearer when real estate market goes into turmoil. However, in order to have purchased products at this moment, project owners must have prepared for at least three years. However back then, medium and high quality apartments were so attractive to customers that few investors thought about it.

In another case, in early November, the information of PetroVietnam Power Land Joint-stock Company (PVL), a secondary company offering flats of Petro Landmark project (District 2, Ho Chi Minh City) with the price of around VND 15.5 million per sq.m pulled in a lot of customers. Regarding PVL representatives, there are hundreds of calls from customers to get information every day. Nevertheless, even though the set prices were considered to be attractive, the selling methods of PVL were not good enough, so the result did not reach expectation.

In the second half of November, the real estate market saw several apartment projects open, like: Golden Palace (urban district Ha Dong), and Green Villas (Hoa Lac). In December, Cleve Van Phu project also started sales when it had finished foundation work.

Furthermore, in Da Nang province, 90 villas and houses of the Empire project did not miss this opportunity to open sales in Hanoi after a period of exploration. The prices range from VND 5.2 billion to VND 6.8 billion, project owners the Thanh Do Group estimated that these prices are very competitive compared to other projects in the same area of Truong Sa line and Ngu Hanh Son district.

Difficulties from many sizes

As information on the real estate market becomes easier to access, it becomes also easier to assess project owners’ strategies. According to real estate experts, project owners who sell at an indifferent level or do not sell at all are those who have financial potential and save their products for further opportunities. Meanwhile, units selling forcibly now, either have prepared with different strategies, or are suffering financial pressure and are forced to sell their products.

The financial shortage and unstable macro-economic situation have obviously influenced people’s thinking. However, from the viewpoint of selling, businessmen also have their objective reason. Around the Tet holiday people’s money source is quite sufficient due to incomes gathered in a whole working year. Therefore, more people are ready to settle down, move, renovate their house or invest in a first property.

In another hand, capital inflows from people living overseas and their interest into the real estate market cannot be ignored. Besides sending money to support their family, their capital inflows run directly into the real estate market.

Mr Nguyen Minh Tuan, Deputy Director of Marketing Consulting Company CBRE, assessed that easing macro-economic indicators such as reduced inflation rate and banks loosening property loan policies are a good premise; in addition, the abundant money savings of people will also liven up the market at the end of year.

“We receive many questions about when is the best time to buy, which means people have demand and their financial potential is high. The fourth quarter is always the most active in the real estate market. Enterprises mostly manage to estimate their profits and employees take stock of their incomes and rewards. Project owners who offer reasonable prices and good proper designs will absolutely attract buyers. Regardless of consumers’ behaviour, project owners who are selling at this moment have surely had long term options. When suppliers try so many ways to approach consumers, there will be various options to fulfil all types of demand,” Mr Tuan added.

Reported by Luong Tuan | VCCI News