The apartment market has seen positive changes when many projects, especially those in the mid-end segment, start launching products again in search for customers who are on their way back to the market.
Market observers said more customers had shown interest in buying houses, but the trade volume did not increase much. It is forecast that it will take at least six more months for apartment trading to flourish.
High lending rates used to be an obstacle that prevents project owners from approaching their customers. However, as lending rates are now going down, project owners are offering their apartments with flexible sale policies to lure buyers.
HVK, a joint venture between Hung Viet Co. and Korea Real Estate Development Fund (KRDF03), last Friday opened for sale the first 100 condos of The Eastern project located in District 9, HCMC. The project is planned for completion in late 2013.
The fully-furnished apartments are priced at VND1.2 billion each, with value-added tax included. Homebuyers only need to make a 10% down payment to receive the houses.
Hung Thinh Realty Transaction Floor last weekend started offering the apartments of the Au Co Tower project in HCMC’s Tan Phu District. When completed in this year’s fourth quarter, the 21-story building will supply 288 apartments for the market.
The flats are offered at VND1.1 billion per unit, said a representative of Hung Thinh. The project owner joins hands with banks to provide loans worth 85% of the home value with preferential interest rate of 12% per annum to buyers in need of financial support.
Similarly, Singapore-based property developer CapitaLand is gauging the market’s purchasing power for the project PARCSpring in District 2, one of the two mid-end projects that the group is developing in HCMC.
Meanwhile, Hoang Quan Consulting-Trading-Service Real Estate Corp. recently put up for sale the Cheery 2 Apartment project in District 12. The project comprises 192 apartments of 50-66 square meters each and 102 apartments of 86-184 square meters, priced from VND600 million per unit.
Homebuyers can take out loans worth 50% of the apartment values with lending rate of 1.25% a month offered by BIDV. The project owner will hand over the houses to customers in late this year after they have paid 50% of the home values.
It is noticeable that project owners are applying flexible payment methods to lure buyers. Most developers accept down payments worth 30% of the house values and the remainder can be paid by installments in 2-3 years with no interest, even with the low-cost condo projects. This trend offer chances for middle-income people to access affordable houses.
Thriving at year-end?
The central bank has loosened the monetary policy and lending rates are going down, yet the number of trades in the housing market remains low. Adam Bury, senior manager of research and consulting of CB Richard Ellis Vietnam (CBRE), said the market could not change vigorously overnight or even in a quarter.
Apartment prices continued to fall in the second quarter, and buyers paid much attention to mid-end and low-end segments. CBRE’s data show that some 94,000 apartments had been launched into the HCMC market by the end of the second quarter, with half of them already completed.
Low-cost apartments accounted for 40% of the total supply. It is expected that the number of apartments will pick up until the year’s end, as the projects previously delayed are being put into operation.
CBRE cited the data of four years ago showing that it took six months for the housing market to regain growth after interest rates were slashed and inflation was restrained at 10%.
Bury noted that what happened in the past would not necessarily happen in the future. “But if the market fares like in 2009, we can expect that at least two quarters after interest rate cuts, apartment buying will increase.”
The Saigon Times Daily