Vietnam real estate market is attracting more and more investors as well as those in need. Recently, many real estate projects have been launched. Though there is no clear market trend, more than a few investors are pulling different tricks to create a “virtual fever”.
In the second quarter of 2015, a series of real estate projects were launched to the market with a fairly large number of apartments and focused primarily on the medium and premium segments. Most notable are the Goldmark City project (500 units), Park Hill project (approximately 4,000 units), Trang An Complex project (800 units), Imperia Garden project (1,600 units), Home City project (1,200 units), Five Star project (1,200 units) and many others.
“Virtual fever”?
According to real estate investors, the market is getting warmer thanks to interest from home buyers as well as secondary investors for the apartment segment; a stroll through some property trading floors can show that this interest is real. However, the liquidity of the market still needs further evaluation. And to create a “virtual fever”, many investors and secondary investors insisted that the market’s liquidity was in a very good shape, which was a trick of investors to push prices higher than the real value. This kind of trick works well with those who have real demand for housing and when these customers decide to buy a home, the price is raised about VND70 - 100 million/unit higher than the real value.
For example, the Imperia Garden project, in the presentation and open sale of apartments, brokers said about 200 units had been sold in the first round; however, after the event, announcement from the investor said that they had successfully sold 500 apartments.
Similar is the Vimeco project (Cau Giay), investors’ spokesman said the project had sold two thirds of the total number of apartments, through creating a fake scarcity to push the price of apartments in such projects VND400- 500 million/unit higher than the original price. Also, the Central Point project (Trung Kinh, Cau Giay) invested by JSC MBLand, in the start-up phase, the apartment price of this project was around VND26.5 million/m2, buyers must deposit VND100 million and pay consultancy fees, the difference drove the price to VND30- 31 million/m2, but up to this moment, it has been pushed to VND32-33 million/m2, some units even being offered at VND36- 38 million/m2, while according to plan, by December this project will only have its foundation finished.
As inquired by Vietnam Business Forum, many projects, despite considerable interest from the people, had yet to improve their liquidity. The real estate market is still in the early stages of recovery, many investors are struggling with financial difficulties. Investors tricking people into a virtual fever would no doubt create risks to the recovery of the market.
Blooming marketing forms
The warm-up of the market has stimulated some investors to open sale, raise capital to continue projects and pay bank loans and land use fees. And to achieve the objectives of capital, many investors and projects make provisions such as customers must pay a deposit, a phase one payment about 25- 30 percent of the total price as well as providing some support such as discount or bank loan support.
At the end of July, HBI JSC, the investor of a 35-floor project with a total supply of up to 1,700 apartments and villas conducted an open sale with prices ranging from 30 - 39 million/m2 (measured by wall heart method), plus VND3 million/m2 (measured by the waterway method). Beautiful units can reach VND43 million/m2. But before the day of open sale, HBI issued a new notification about adjusting prices to VND30 - 41 million/m2, this would raise the price about VND70- 100 million/unit.
At the opening sale of the Imperia Garden project, although there was a huge crowd of participants, only a fraction really came to learn about the project while the majority were guests who had no wish to purchase apartments. Also, in order to further warm up projects, many investors prior to the opening sale would launch a media campaign including heavy advertisement, text messages and phone calls to invite customers.
Although these are all old tricks, it still poses high risk and getting rid of this situation is not an easy task for authorities.
Luong Tuan
Vietnamese
