The Vietnamese real estate market is expected to gain ground as macroeconomic situation is more positive, the Government has launched a new support package, and lending rates are in downward spiral.
Time for affordable housing
The Government-backed business support package is producing positive effect. The possibility of living through this tough time is becoming clearer for enterprises. Together with land tax deferral worth VND64 trillion, tax breaks worth VND35 trillion and public investment valued at VND12 trillion from now to the year’s end, the State Bank of Vietnam (SBV) aggressively lowered deposit interest rate ceiling by two percentage points to 9 percent per annum while the lending rate ceiling was brought down to 13 percent.
Consistent and timely measures are supporting businesses in general and property companies in general to pass through their dilemma. Prolonged steep slump is property market is expected to reach the bottom. Hence, many start to anticipate a strong recovery, particularly when interest rates are falling down.
At an online dialogue via the governmental information portal last week, Construction Minister Trinh Dinh Dung said that the property market is somewhere at the bottom. This is a chance for buyers to pick up cheap assets.
Many property investors decided to go ahead with new products. In Hanoi, the capital of Vietnam, investors focused on introducing apartments with a price ranging from VND600 million to VND1.2 billion each, depending on usable area and location. Affordable housing projects are mainly situated in Ha Dong district like Dai Thanh New Urban Zone and The Sun Garden. A small number of housing products are introduced in other locations such as Thang Long Garden at 250 Minh Khai Street (VND18 - 19 million per square metre) and Berriver Long Bien in Long Bien district (VND24 million a square metre).
Upmarket apartment segment is putting growing pressures on investors because high-grade apartments are unaffordable for most buyers. Therefore, both primary and secondary investors are offering a lot of incentives like free parking or direct discount to entice customers.
Many investors have to lower quoted prices to boost sales. Mai Linh Investment Joint Stock Company quoted VND30 - 33 million per square metre from VND39 million in Golden Palace Me Tri project. Golden Land project at 275 Nguyen Trai Road - a premium location in the capital city - announced to support borrowing interest rates for buyers.
In the south, apartment projects with selling price from VND13 million to VND20 million per square metre started to increase prices. Green River City project raised prices by VND2 million a square metre and Gold Hill project lifted up VND3 million. However, many investors still felt confident with their price hike decisions after the market experienced a very long time of slump.
Hoang Quan Real Estate Company is quoting VND12.3 million per square metre for an apartment project in Ho Chi Minh City. With this price rate, a customer only needs to pay VND600 for a 50-66 square metre flat. Petro Land project is selling 48 apartments (area from 60 to 104.8 square metres) at VND15.6 million per square metre.
Good opportunities for market
Nguyen Huu Cuong, Chairman of Hanoi Real Estate Club, said: Declining interest rates and the Government-backed business support package are what the property market has longed for more than one year. This will be an opportunity for property market recovery.
He said if the support package works as expected, affordable housing segment will gain ground. Companies will sell more products, workers will have jobs; and citizens will have the new residences.
According to real estate investors, small apartments have higher demand than larger ones. A flat with a usable area of over 100 square metres and selling price of over VND20 million per square metre is hardly sellable at the moment.
Luong Tuan
Vietnamese
