This year, the segment of the apartment Hanoi will receive a bigger supply with more than 5,000 offered for sales in the first quarter of this year, which has driven the apartment market into saturation.
Bigger supply
Investors have launched diversified apartments over the past time, ranging from low-cost apartments to luxurious apartment and from the west to the east and in Cau Giay district. In mid-April, Indochina Land launched 207 apartments of the Indochina Plaza Hanoi in Cau Giay district, Keangnam Hanoi Landmark Tower has sold a additional 20 per cent out of 918 apartments of the project which is being built Pham Hung street.
The apartments built by Nam Cuong group account for the majority. Early April, Nam Cuong group continued mobilised capital for 116 apartments of Co Nhue new urban area in Tu Liem district. In the next years, the group will sell 400 more apartments in Duong Noi urban area in Ha Dong district.
Despite smaller number of apartments offered for sales this time than late 2009, the customers have choices. Among 116 apartments of Co Nhue new urban area, Nam Cuong group several tens of them. The rise in the starting price to US$1,300/m2 from US$900 applied a year ago is one of reasons causing the fall in demand. Besides, the changes of apartment market make buyers become more careful.
Therefore, many investors decided to stop selling apartments to wait for the stabilization. Nguyen Manh Huy, an official of the sales department of Nam Cuong Group said his firm is completing construction of a number of buildings at Duong Noi urban area for sales, however, it decided to stop selling apartments until the market re-stablilisation.
Realty experts said, the Vietnamese real estate market in Vietnam, especially in Hanoi and Ho Chi Minh, has a great number of secondary investors, short-term investors. This situation makes the demand not reflected honestly. The “speculative investment” has not brought them as many successes as before but is among main reasons leading to the standstill of the apartments segment.
At present, many investors can’t sell their apartments. For instance, people who raced with one another to buy apartments in Duong Noi or Indochina Plaza at the end of last year for “speculation” now must continue contributing capital to their purchase as they failed to find customers.
According to the experts, the apartment segment in Hanoi is becoming similar to the market in Ho Chi Minh City two years ago. The situation of standing in line to buy Nam Cuong apartments is similar the case of Phu My Hung and the Vista apartment purchase. However, the situation has become “cold” quickly due the rising supply of apartments. In the recent years, many investors have slashed apartments selling prices and the time of “best sales” is over. Only few apartments in Ho Chi Minh City launched last year have not yet been sold out to date. According to forecast of CB Richard Ellis company, the apartments supply this year will be up to 30,000 apartment, three folds higher than last year, which will bring about big pressures for the investors in Ho Chi Minh City.
Pressure of prices reduction
CB Richard Ellis company said, this year Hanoi is forecast to have 8,500 new apartments, excluding apartments which launched last year but have not yet been sold and will be sold this year such as Usilk City or Dolphin Plaza. With the bigger supply, buyers will be more careful to make decision for apartment contracts. The figure of 8,500 new apartments will create big pressures for the investors and it is considered as the suitable time to plunge the surfing opportunities of the short-term investors. Many people believe in further drops in apartment prices.
The investors are facing big pressures, but no investors in Hanoi has announced sharp price cut as much as those in Ho Chi Minh City and they are trying to attract more customers by any way. Recently, Nam Cuong has announced to sell CT7 – Le Van Luong apartment block at the lowest price of VND14 million/m2, a quite low level compared to other apartment projects of the same kind launched in the city last year.
However, Nam Cuong has just completed exterior construction of the new apartments, while interior details, including electrical equipment and toilets, have not yet been finished. It is impossible to know whether Nam Cuong’s price reduction is successful or not, but this shows the fact that sales of apartments in Hanoi are facing difficulties, which have some things in common with Ho Chi Minh city at present.
At a recent press conference, Peter Ryder, General Director of Indochina Land admitted that the apartment price of Indochina Plaza fluctuates between US$2,900 – US$3,300/m2. He did not hope that the sales of these apartments will be quick as at the end of 2009 due to market difficulties.
Luong Tuan
Vietnamese
