High-end property segment undeterred by tough conditions

Investors are struggling to do all what they can to lure buyers through various incentives.

As compared with the so-called affordable housing units whose selling prices are bellow VND20 million per square meter, the high-end segment with apartments and villas worth several billion per unit is facing tough sales. Interest rate support, flexible payment terms, lucky draws and discounts are among the multiple incentives developers are offering for winning buyers.

But the tough market conditions have not deterred a number of developers from launching their projects.

Among those developers is Khang Dien Housing Trading and Investment Joint Stock Company which on Saturday started marketing its luxury Goldora Villa project underway on Lien Phuong Street in Phu Huu Ward in HCMC’s District 9. The project covers some eight hectares with 119 villas of 192 to some 1,070 square meters, with prices starting from VND6.5 billion per unit.

Ly Dien Son, general director of Khang Dien, said the company had decided to launch the project to assert its business development strategy in spite of the current challenges and that the company had received feedback from the market since it launched Villa Park project nearby the newly launched project.

Villa Park is jointly developed by Khang Dien Co and Prudential Vietnam Fund Management Co, a Prudential subsidiary. It has 213 villas and garden row houses and serviced utilities such as swimming pools, Jacuzzis, barbecue gardens, sport clubs, tree parks and a kindergarten. VND1.5 trillion has been allocated for the first phase of the residential project.

Dien said some 60 villas in the first phase of the Villa Park project were sold with prices ranging from VND3 billion to VND9 billion a unit, thus encouraging the developer to move on with its second villa project in the area.

In another development in the same area, VinaCapital Real Estate Company is pressing ahead with a plan to launch a residential project later this year after it saw success in the first project nearby.

David Henry, managing director of the company, said the company would invest some US$40 million in Garland 2 project with 72 villas and four condominium towers.

The firm is expected to get positive feedback from the market as seen in Garland 1 project whose 53 villas have been snapped up.

The high-end segment on Saturday saw the Singaporean property company Keppel Land Limited and its local partner Tan Truong Company launched their mixed-use development in HCMC’s District 7.

Some 193 apartments in its Riviera Point project along the Ca Cam River in District 7 are offered from VND30.7 million (US$1,460) per square meter.

The US$200 million project has 18 residential towers with a total of 2,400 apartments of two to four bedrooms. Like other developments, it has spaces for retail shops, food and beverage outlets, and recreational facilities. As planned, the first phase of the project with 549 apartments will be completed by 2014.

Linson Lim, president of Keppel Land International for Vietnam, Thailand and the Philippines, agreed the current residential market was tough for all developers. However, the Singaporean company has a long-term development strategy in the Vietnamese market where it expects to see challenges overcome in the coming time.

Flexible payment methods

While a number of developers look optimistic, many others are struggling to do all what they can to lure buyers through various incentives.

For example, Novaland Company has started up a free-staying program to get buyers’ feedback for its 39 apartments in the Sunrise City project in HCMC’s District 7.

In the program, the buyer will place a deposit equivalent to some 20% of the total value of an apartment when they sign a contract. The buyer then will make an additional payment equivalent to 60% to take delivery of the apartments. They are eligible to stay in the apartment for two years without paying a fee. After two years, they will pay the remaining 20% once they want to buy. If they do not want to buy, they can return their apartments to the company and take back their deposits together with the interest.

In another development, Phat Dat Corporation allows buyers to pay in 48 installments in the EverRich 2 condo project in District 7.

Instead of fixing a payment schedule, the firm is willing to design a payment method that fits the buyer’s monthly income. The first required deposit is 10% of the total value of an apartment and from the second to 47th payment, the buyer will pay a mere 1.3% at a time.

The company calculates that for a VND2.5 billion apartment, the buyer can pay some VND40 million per month. The amount of payment is believed to suit the income of a young family.

However, time will tell which incentives work, and which developers will win the race to attract customers. The current credit crunch and high interest rates have impacted on both the developer and the buyer. – SGT

Tags: Vietnam Property market, Vietnam property sector, vietnam real estate market