Vietnam’s real estate market seems to be warming up with more buyers in recent days as local people have the habit of making purchasing deals in the last months of the year.
A Hanoi-based real estate brokerage company said that the number of customers seeking to buy houses these days has increased by 30 per cent over the previous months. The company’s staff said that the demand for houses and land always increases at the year’s end.
Land owners now want to sell their land plots and houses for fear that prices will go down further. In addition, according to Retech, a real estate trading firm, land speculators now want to sell land plots to get capital for speculating gold, which promises to be lucrative as gold prices are skyrocketing.
Medium-class apartments priced at VND400-700 million (US$25,000-43,750) prove to be the most wanted nowadays. According to Cao Thanh Binh, Director of Hanoi-based Hoang Quan Price Appraisal Company, these houses are selling well as they are affordable for many people.
However, he said that the current prices are still higher than the actual value; therefore, customers are still waiting for further price decreases.
That explains why the proportion of successful transactions at real estate brokerage centers remains low, at 10-20 per cent. Customers are very careful about the transactions valued at VND2 billion ($125,000) and higher.
Though high-grade apartments are in profuse supply, they are still expensive. Customers now have to pay $2,000 square meter to buy an A-class apartment at Pacific Palace in Hoan Kiem district in the center of Hanoi.
Meanwhile, a B-class apartment in Kim Ma street or at Hoa Binh Towers is selling at $1,000 per sq m.
Real estate traders said that high-grade apartments will not go down in prices as expected, but they will even be more expensive as the result of the new foreign investment flow to Vietnam. However, the supply of high-grade apartments may be abundant in five years as a lot of projects are under construction.
The demand for leasing high-grade offices and apartments in Hanoi is increasingly high, while the supply is limited, resulting in increased fee levels. Customers now have to pay $20 per sq m to lease an office at Ocean Park, $27 per sq m at Hanoi Towers, and $30 per sq m at Vincom City Towers.
In the current context, foreign investors are trying to cooperate with local real estate firms to run real estate projects to make profit. The Hoa Binh tower on Hoang Quoc Viet Street in Hanoi, for example, was designed and constructed by a Vietnamese company, which then sold the project to a foreign group. The group then improves the tower and develops it.
The said cooperation model proves to be very effective in the current situation. It takes a foreign investor only half a year to develop a project instead of three years if it undertakes all the necessary steps of the project.
Local real estate firms should sell the buildings because they are keen on construction only, while they have no experiences in building management, which is the strength of foreign groups.
Vietnamese
