VietNamNet Bridge – A lot of high grade apartments have been marketed recently in Hanoi, while transactions on real estate trading floors remain quiet with low demand. Small investors now offer to sell apartments at a disadvantage to stop loss.
Investors’ capital “buried” under apartments
“The project is expected to cover an area of 500 hectares, but the project developer has just finished a small part of the project. I think that it will take a long time more to complete the project,” she explained why she decided to sell the apartment. “I would rather to sell now and incur losses than waiting more”.
Trang has calculated that if she sells the apartment now and inject money in other apartments now on offer, she would obtain a bigger profit.
However, even when Trang accepts to sell the apartment at a loss, she will find it uneasy to find buyers. Even the developer of Ecopark is now offering the big discount of 12 percent to attract buyers.
The Tue Tinh real estate trading floor in the Hai Ba Trung District in Hanoi only received two or three visitors in the whole morning. Quyen, a broker, said there has been no high grade apartment successful transaction in the last month. He also said that many investors are offering to sell Ecopark apartments on the floor.
“Most of the investors have to borrow money from banks to surf on investment. But they now have to pay debts to banks, therefore, they have to accept to sell at a loss,” Quyen said. “However, it is difficult to sell apartments at this moment, because the projects’ developers themselves also offer high discount rates to attract customers”.
On Dat Xanh real estate trading floor in Cau Giay District, Hoai Thu, a broker, said there have been only some successful transactions recently, where people purchase the apartments of Times City project. “The sellers are the ones, who could purchase the apartments at low prices thanks to the “close relations” with the developer and VIP,” she said.
Other real estate trading floors in the city have also been reportedly quiet because of the low demand.
However, project developers still have announced satisfactory sales results. Bui Tien Hung, Deputy General Director of Vihajico, the developer of Ecopark, said with the discount of 12 percent within three days, April 23-25, 85 percent of clients, who visited the project, registered to buy apartments during the day, while some others returned the next days in order to be able to purchase apartments at preferential prices.
Supply exceeding the demand
According to Colliers International, there are some 45,000 apartments in Hanoi. About 11,000 new apartments were offered to sell in the first quarter of 2011. They were mostly the apartments of the projects in the west of Hanoi such as Ha Dong district (28 percent), Thanh Xuan (29 percent) and Tu Liem 14 percent.
Colliers International has forecast that in the next three years, Hanoi would have 70,000 new apartments in supply. Vu Xuan Thien, Deputy Director of the Housing and Real Estate Market Department under the Ministry of Construction, said that the supply of apartments at old projects is still profuse, while new apartments have been marketed already, which has led to the saturation in the high grade apartment market.
Explaining the gloomy high grade apartment market, Nguyen Quang Hung from the Hanoi Real Estate Club, said small investors are trying to bargain away now because of their financial problems. The investors purchased apartments with the borrowed capital, while banks have stopped lending capital to fund real estate investments and have been trying to take back loans.
Source: Tien phong