Southern hub property market still in nightmare

Ho Chi Minh City’s sleepy apartment market sees no sign of improvements amid a difficult economy.

“Never before has the property market been as stagnant as it is this year. There were a number of homebuyers by late 2008-2009, a period which was hurt by economic turmoil but there was almost no transaction at this time of the year,” said property firm TechcomReal’s general director Nguyen Xuan Loc.

Loc added that while homebuyers were almost absent, scores of customers wanted to sell apartments under consignment at prices equal or even lower than original prices to recoup capital.

“It seems that there are no opportunities for apartment projects at this point of time. The customers are reluctant even towards attractive sales promotion policies,” said Hoang Anh Sai Gon Company’s general director Doan Chi Thanh.

Tac Dat Tac Vang Company’s general director Hoang Anh Tuan said the market problem was rooted in the big gap between the supply and demand.

“Amid squeezed credit lines, many real homebuyers could not or did not dare to take on loans with high lending rates. How can developers sell out products when there are no buyers?” said Tuan.

Tuan said it was unlikely the southern property market would see the light at the end of the tunnel next year.

Reality shows that though the land and housing price slid remarkably in the past months, the customers are waiting for further reductions.

“The customers have taken a wait-and-see approach while firms wanted to sell out products as soon as possible through rolling out diverse promotions and discounts. This could worsen market situation,” Tuan commented.

Later last week, real estate firm Anh Tuan Group offered land plots under Anh Tuan Garden land plot project in Ho Chi Minh City’s Nha Be district at price of VND6.5 million ($309) per square metre against VND8.2 million ($390) per square metre offered in the previous launch. However, the project did not grab much attention from customers.

Recently, Vietcomreal launched its Moon Garden apartment project in the city’s District 4 at prices ranging from VND24-26 million ($1,140-$1,240). The project, however, could not appeal to customers despite having a ‘good location’.

According to Vietnam Housing Joint Stock Company chairman Tran Van Thanh, a number of property firms were brought to court as they had violated contract terms signed with the customers. In anther case, some firms had to take on quick loans with high interest rates to pay up staff salaries and cover operation expenses.

“These disorders are just the start unless market rescue policies are introduced in a timely manner,” said Thanh.

Source VIR

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