To resolve the output for the real estate market, one of the solutions launched by the Ministry of Construction and receiving the consensus of the Government is encouraging investors to change the business housing projects into social housing projects. Perhaps this is the most feasible solution in the current situation, as it has received a positive response from many investors.
Medium-grade segment dominates
In 2012, the Hanoi market witnessed a range of real estate enterprises which accepted having to cut losses to increase liquidity. Due to low market liquidity, and lack of funds to continue construction, many project owners have had to lower their prices; especially high-end residential segment has been reduced from 10 to 30 percent, and the special segment adjacent villa project was reduced to 50 percent compared to the early published stages. Price has been reduced but it has not yet created the trust of investors. In December 2012, 20 projects announced offering discounts compared to open tranche from 15 – 30 percent.
According to Mr Nguyen Van Duc, Deputy Director of the Good Land Real Estate Corporation, 2013 will be a boom year for supply of apartments in the medium-grade segment. Competition among enterprises will be more intense. Buyers will have more opportunities and a wider ranger of choices.
In fact, as the market continues to "freeze", secondary investors still stand out of the market, liquidity can only rely on those who have real needs. Accordingly the majority of people are not affordable for the high-end apartments or villas adjacent although investors took the initiative to adjust the prices down. Therefore, the proposal of the Ministry of Construction is seen as the most likely hope now.
Many said that the real estate market in 2013 will be the race of the medium-grade apartments. This is shown when Trung Van urban project built by the Hanoi Investment and Construction Corporation has applied for adjustment of investment objectives of commercial houses to low-income houses. Accordingly, Hanoi Investment and Construction Corporation increased to 55 percent of land for low-income housing development, the remaining 45 percent for commercial housing development.
Besides the projects that can move to social housing, some investors are directing their product into customers. These include project Westa (Mo Lao, Ha Dong), investors give new policies sold for VND 16.7 million/ m2 (including VAT and 2 percent of maintenance fee). Investors of Dang Xa new urban projects, Viglacera Land officially launched 128 apartments CT6 of Dang Xa new urban center for VND 13.46 million/m2. The southern region is more attractive with a series of low-cost projects offered for sale since late 2012 such as Anh Tuan Apartment (VND 9.7 million/m2), Cherry 4 Apartment (VND 12.06 million/m2) , Tanibuilding Son Ky 2 (VND 13 million/m2) Carina Plaza (VND 13.2 million/m2) ...
Competition continues
Housing needs of the people are still very big, but they are concentrated in the medium-grade segment, so many investors have focused on this segment, the supply market is heating up and the growing competition is increasing with the participation of more and more investors.
Mr Pham Trung Ha, Director General of Hoa Phat Land said there will be a abundant supply of apartments in the medium-grade segment, the competition between the real estate businesses will be more intense, and buyers will have more choices.
However, at this time, in addition to competition for location, price, add-on project, and the competition in terms of area apartment-equally important factors besides retail prices are very interested.
Dr Vu Dinh Anh said that apartment prices are decreasing in the real value; the investors are taking different promotional tactics to sell. It is important that investors compete with each other is to demonstrate the ability to build their projects, because even when offered cheap apartments, the buyer will not buy them if they do not see the assurance in the building. Middle Medium-grade segment will be a bright spot on the 2013 real estate market as demand is still large, but it’s not sure that the investors to invest in this segment will all win. According to many experts, this segment is fierce of competition in 2013; the advantage will belong to the businesses with high reputation, product quality and financial capacity. However, each business has its own strategy and reputation, to create confidence in new customers, stand firm to compete in the market.
Luong Tuan
Vietnamese
