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News content

[Vietnam] Apartment market into new race

FileCaption1_eng
2014-12-29-(Mon)
【28Hse News】  
Year end is the time when property projects compete for getting sales revenue to close profit. In order to attract customers, many investors of premium segment heat the market with attractive promotional tactics.

New Attractive Supply
Vinhomes Nguyen Chi Thanh Project started November fever on market. After that, apartments in Home City Trung Kinh were sold at prices from 26.5 million VND/ m2. Helios Tower Project at 75 Tam Trinh also stirred the market in its first sale phase. Apartments in Block B of Hoa Binh Green City Project invested by Hoa Binh Co., Ltd. will be offered to the market at price of 38 million VND/ m2.
In HCMC, year end also sees tens of thousands of apartments offered to the market. The highlights are Vinhomes Central Park Project in Tan Cang, Binh Thanh District developed by Vingroup with scale of up to 10,000 units; Novaland with thousands of units from large-scale projects; Scenic Valley project of Phu My Hung with nearly 400 units ...
According to the latest report of Vietnam Real Estate Association (VNREA), the future supply of apartments will be plentiful. In Q4- 2014, with the explosion of low-cost apartment segment, the market hits a new record of projects with a total supply of thousands of units.

New supply massively hit the market
Real estate market since the beginning of 2014 showed that in first half of the year, affordable apartment segment has been identified as leading market segment, but now high-end one gets the better performance.
Reason for increasing demand of high-end segment is the limitted new supply. For example, at Vinhomes Nguyen Chi Thanh project, within 2 hours after the opening of sale, 70% apartments have successful transaction, eventhough each unit can cost up to 66 million VND per m2 (excluding VAT and maintenance fee).
Forecasting the attractiveness of projects, some investors also slightly rise their price in 1st sale phase such as Thang Long Number 1, Times City, Hoa Binh Green City, etc.
According to Ministry of Construction, in November 2014, the number of successful property transactions in Hanoi is approximately 10,000, an increase of 200% over 11 months of 2013. In HCMC, the number of transactions within 11 months of 2014 was 8,850, up 135% compared with 2013.
Promotion Race
Investors of luxury segment are also more generous in promotions to attract customers. Vingroup gives a $1m yacht- the newest design of Sunseeker to an owner of hi-end apartment of Vinhomes Central Park project. With "Royal Apartments" in Block R1, R2 of Vinhomes Royal City, buyers just have to pay 50% to get chance to own 3 Mercedes - Benz S400. The rest will get supported loans with 0% interest rate. Customers who buy apartments of Lexington Residence will be supported 0%- interest loans for 3 years and a chance to win an VND1.6- billion Audi.

Year end is the time when property projects compete for getting sales revenue to close profit
Mr Le Chi Hieu- CEO Thuduc House said, with a series of real estate projects launched in 2014, iinvestors are very flexible with their business plans to access capital. They can spend more money for advertising, apply flexible kinds of payment to share financial burden with customers and increase incentives and supports.
Plentiful supply of apartments on the market today will also puts pressure on price and quality of projects. Therefore, investors should have price strategy towards affordability of customers and apply more policies and tactics to promote purchasing power to catch the needs of market.