Real estate giants in Vietnam start to offload
After the thin expectations from the start of 2012 till now, the most optimistic people also had to admit that it is hard to wait for a miracle in this difficult context.
Information and transactions of land prices, apartments and office-for-lease in big urban areas nationwide have been declining. The condominium supply is still slowing down due to partially secondary markets keeping condos projects are demanding to offload products to take cash whereas the purchasing power is not stable because of the wait-and-see attitude.
According to HCM City Construction Department, the city last year had 19 completed projects that supplied 7,014 apartments, lifting the accumulated supply of 163 completed projects and 41,378 apartments. The proportion of common condo project was one third, and remainder was medium and high-class apartments.
Meanwhile, buyers recently aimed at the common apartment segment, which was shown via successful transactions in the apartments with price range of 11-15 million dong per square metre.
In 2012, around 28,000 completed apartments the projects that had been delayed in previous years will be offered to the market, including 11,632 common units or 42 percent, 400 luxury apartments or 1.4 percent and 16,000 medium-class and high-class units accounting for 56.6 percent.
Despite the supply and demand of apartment segment seemed to be more balanced, the supply keeps increasing while a lot of apartments have not been sold, which will create price lowering pressure on the real estate market.
2012 is expected to be the year of property project trading. In Hanoi and HCM City, selling projects is getting busier with the number of sellers more than the buyers who are still waiting for more attractive projects. In HCM City, the sellers are Thai Binh Duong (Pacific) Infrastructure and Real Estate Development Co, Hoa Binh Real Estate Construction and Trading Co, Dat Lanh Real Estate Co, Van Phat Hung…
Most investors are seeking potential buyers because they are not able to raise capital to keep projects going or complete projects.
Given assessment on the situation, Nguyen Van Duc – deputy director of Dat Lanh Real Estate Co said that around 60-70 percent of uncompleted investment projects are suspended in HCM City at this time. Traders have to accept to sell projects to cut losses in this the difficult context.
Marc Townsend, CEO of CBRE stated that this was the first time Vietnam’s real estate market saw a lot of such transactions and now is right time for foreign investors to enter Vietnam.
Many people shared with the point of view. Strong enterprises have opportunities to buy back the good projects and investment will be started in the near future.
Vietbiz24.com - April 21, 2012
Bargains in Hanoi’s property market
Experts set eyes on Hanoi’s villa and housing market in the first quarter of 2012.
Savills Vietnam’s 2012 first quarter property market report showed that Hanoi is currently home to 117 property projects with around 40,000 villas and terraced housings. Of these, 24 projects involve with capital contribution contracts and the remaining 93 projects are transacted through trading contracts. Around 27,300 apartments in the suburban districts of Me Linh, Quoc Oai and Dan Phuong involve capital contribution contracts with prospective buyers.
The report also revealed that the price of villas and terraced housing has gone down in most areas in Hanoi.
As it is, a high of VND120 million ($5,700) per square metre was spotted in the districts of Cau Giay, Tay Ho and Tu Liem.
The price of property that involves capital contribution contracts was less than VND40 million ($1,900) per square metre, and property in some projects in Me Linh and Dan Phuong districts can be purchased for just VND15 million ($710) per square metre.
In the first quarter of 2012, terraced housings and villas in new urban areas could be bought for 20-30 per cent less than in the same period of 2011 and properties that are 60-80 square metres and cost VND2-2.5 billion ($95,000-$120,000) grabbed customers’ attention, according to property consulting firm Sohovietnam.
“The property market was sombre in the first two months of 2012. Things got brighter starting in late March when there were a number of transactions,” said Sohovietnam’s chair Phan Xuan Can.
CBRE Vietnam’s chief executive officer Richard Leech said that the impressive pace of construction at Vincom Village in Long Bien district’s Sai Dong area by leading property developer Vincom was almost the only bright spot in Hanoi’s villa and terraced housing market in the first quarter.
“A sequence of support facilities and project infrastructure was completed which matches construction progress of the villas. The developer and contractors have been in full swing to reach their progress targets,” said Leech.
Also according to CBRE Vietnam, in the first quarter of 2012 prices have continued to fall in half of Hanoi’s new urban area projects.
Regarding property projects which are in an early stage of construction, prices have fallen an average 5 per cent against the previous quarter while the price at completed and nearly completed projects has not changed.
Vietnam Investment Review - April 21, 2012