High-end apartment sales slow, speculators flee

VietNamNet Bridge - Speculators are leaving the high-end apartment market, causing a sharp fall in the market segment, reported Doanh Nhan Sai Gon. 


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The real estate market has warmed up



The pressure on real estate developers has become more intense, especially after commercial banks began tightening credit.

Having been put on sale for two years, 50 apartments at the high-end apartment project in Tay Ho district in Hanoi remains unsold. Advertised as located in an advantageous position, having high profitability and offered with attractive preferences, sales have been going very slowly. 

It is estimated that each apartment is valued at VND4 billion, so VND200 billion worth of investment capital has not been recovered.

Leasing apartments now cannot bring fat profits, so speculators are not pouring money into the market segment. 

Now is the time for investors to check products to prepare for the year-end launch. The market needs more time to ‘absorb’ products left unsold from previous quarters. To improve consumption, some investors have become cautious when launching new products. 

Nguyen Hoai An from CBRE Vietnam commented that now is the time for investors to check products to prepare for the year-end launch. The market needs more time to ‘absorb’ products left unsold from previous quarters. To improve consumption, some investors have become cautious when launching new products. 

A report showed that 5,900 apartments were sold in the last quarter in Hanoi, a decrease of 22 percent compared with the same period last year. The number of apartments offered for sale in HCMC was 6,109, down by 36 percent.

JLL Vietnam also commented that investments in the high-end market segment are cooling down because of the supply.

While the market lacks low-end and mid-end apartments, more and more high-end products have been marketed. The market has become busy again with three new projects located in advantageous positions, namely D’Eldorado 2, Starlake và Vinhomes West Point.

High-end apartment projects account for 37 percent of total products for sale, an increase from 15 percent in the first quarter. It is expected that 32,000 apartments will be put on sale in Hanoi in 2018, a decrease of 10 percent from 2017.

In HCMC, high-end products are leading the market, accounting for 54 percent of total supply, followed by the mid-end market segment, with 42 percent. 

A high-end project introduced in the second quarter, Cove Residence, is part of the Empire City project with 40 apartments.

According to CBRE, the decreasing offer of sales is good news for the market, because this reduces stock. This shows that real estate developers have more experience in developing projects and analyzing the market.

An Ninh Thu Do reported that though banks have a lot of capital, credit growth has slowed. Banks are tightening lending to risky business fields such as real estate and securities, because the markets have witnessed hot growth in the last few years.


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Kim Chi

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