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Realty firm VietRees expects mid-range apartments to remain a safe investment channel in Vietnam next year compared to securities, gold and foreign currency.
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| Nam Cuong Group has sold 500 apartments at the Le Van Luong Residentials Project since mid-October |
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| Indochina Plaza Hanoi also faces difficulties to find customers |
Since mid-October, Nam Cuong Group has made apartments available for sale 3 times, selling 500 apartments at the Le Van Luong Residentials Project in Hanoi. They will offer an additional 200 apartments for sale on December 17.
Experts said the apartments have been selling well because they meet people’s living expectations. When the real estate market’s liquidity is low and banks still tighten their loans to the market, investors will have to target customers who have real accommodation demand. Currently, the successful sales rate of 60-square metre apartments worth over VND1 billion (USD50,000) each, such as those in Le Van Luong Residentials Project, are quite high.
According to VietRees, many property investors in Ho Chi Minh City offer apartments priced at VND22 million (USD1,100) per square metre or less. These projects are mostly in Districts 7, Binh Thanh, Tan Binh, Tan Phu and Binh Tan. They’ve drawn great attention from customers.
Speculators have also focused their investments on the mid-range housing segment rather than higher end project. Investors themselves want to sell the apartments to people with the real need for accommodation.
VietRees estimated that, in 2011, the Vietnamese property market will improve compared to 2010. They also say that apartments priced under VND20 million (USD1,000) per square metre or those covering an area of less than 60m2, 75 m2 and 90 m2 and priced between VND800 million (USD40,000) and VND1.4 billion (USD70,000) each will sell very well.
Difficult for luxury apartments to find customers
A range of high-end apartment projects have faced difficulty in sales this year, even at prices considered to be reasonable.
VietRees said, the successful sales rate of many projects in Ho Chi Minh City have only reached 30 - 40%, a record low compared to previous years, due to low purchase power. Most luxury apartment projects are located in the city centre, eastern and southern Ho Chi Minh City.
To boost the sales, investors have applied methods such as dividing their projects into different levels to meet diversified demand of the market; offering promotions; ensuring to keep VND/USD exchange rate unchanged and launching discounts.
A number of investors have changed their marketing and distribution representatives three times or more however, they still fail to realise their sale goals.
The same situation is also seen in Hanoi. Just 40% of the total number of 390 apartments in Indochina Land’s Indochina Plaza Hanoi project have been sold since late 2009 although the investors have offered a variety of promotions.
Indochina Land has selected CBRE Vietnam as its third marketing firm for the project after Savills and Knight Frank.
VietRees said many investors focused on project development instead of considering the market demand carefully, which is among causes of the stagnant sales of most of luxury apartments.
