Almost completed apartments: A promise of safety and security

Almost completed apartments A promise of safety and security

New appetite

The pace of construction was accelerated at the site of the Valencia Garden apartment project by MIK Group in the early days of 2018. According to the representative of the developer, the project in Hanoi is progressing according to schedule and a significant amount of apartments will be handed over to homebuyers before the Lunar New Year of the Dog.

MIK Group is continuing its sale plans, meaning that buyers of Valencia Garden units may receive their dream homes instantly or in a short while.

Quick hand-over is the factor that explains why Valencia Garden was selling very well every time a sales event was launched.

In fact, in the current real estate scene, many developers have chosen to prove their reputation and strength by swiftly finishing their housing projects and launching sales. This will give buyers a visual experience of their dream homes and give them a sense of security when signing purchase contracts.

Definitely, it was not until now that developers have started finishing construction before selling products. For the last three years, several developers have actually applied the strategy of launching sales as soon as they got near to completing the finishing stage.

This new trend is unlike the common practice of developers meticulously investing in several sample houses at other locations to then offer products for sale as soon as they finish the building foundations.

To blow away the concerns of deep-pocket homebuyers over the quality of apartment building projects, many developers have chosen to expedite their projects to the finishing stage before launching sales. Homebuyers, after visiting the project site and taking a look at what their apartments will be like, find it easier to make the ultimate decision.

Nguyen An Tam, a bank clerk in Hanoi’s Hadong District, and his spouse visited seven project sites over the past six months in their quest for a dream home.

Only for the eighth time did they found the perfect fit at an apartment project in Hanoi’s Van Dien townlet. Though having to spend VND200 million ($9,090) more than initially planned, the couple is very happy as the project has basically finished construction and they can move in before the Lunar New Year.

Not only that, the couple might soon receive their home ownership certificate from the developer.

Similarly, Thanh, an engineer, and his wife have just bought an apartment at a completed project in Hanoi’s Trung Kinh Street.

The couple is glad as their new house enjoys fairly comprehensive infrastructure in the surrounding area. Besides, from the new house it will be more convenient for their daughter to go to school.

“I feel a bit pressured by the dense payment timeline, but I could verify the apartment’s quality and do not need to wait for hand-over,” Thanh said.

He counted that if he bought an apartment at a project that just started construction, the sum needed to spend renting an apartment to wait for the hand-over might be even higher than the additional sum he spent on their new apartment.

As the supply mainly consisted of projects that only finished the foundation, prospective buyers could easily be lost in a quagmire when buying products of incapable developers. Buyers might even face the risk of runaway developers or situations when the product quality is incommensurate with the money they have spent, making disputes inevitable.

In fact, the aforementioned cases have taken place at many residential projects across Hanoi in the past years. One of the most notorious cases was the Berriver Long Bien project by Hanoi Construction and Investment JSC 9 (Hanco 9) in mid-2014. With attractive promotion packages, hundreds of customers registered to buy apartments at this project and fulfilled payment. However, before the construction was completed, the project was abruptly suspended. Half a year later, the buyers had to accept to spend additional money to have the works finished. The project has been eventually completed, but its belated hand-over had caused significant losses to the buyers.

Notwithstanding, homebuyers at Berriver Long Bien were still luckier than those who had paid deposit at the Nhan Chinh residential project in Hanoi’s Thanh Xuan District. Nestled on a golden location facing Nguy Nhu Kon Tum and Le Van Thiem streets, the project was a magnet to homebuyers, especially in the wake of sales promotion campaigns promising a bargain.

After collecting payments from each homebuyer, the developer abruptly stopped the project. The buyers had repeatedly sent claims to the developer, as well as contacted authorised management agencies, but their efforts were in vain. Eight years later, the project site remained almost completely empty.

Numerous near-finished projects await hand-over

Advantage on buyer side

According to the real estate consultancy firm Savills Vietnam, from now to mid-2018, nearly 87,000 apartment units in diverse segments will come to Hanoi’s realty market alone. Besides, after the National Assembly (NA) approved a resolution piloting tackling non-performing loans (which came into force from August 15, 2017) and regulating the handling of collaterals in property projects, it is likely that supply sources would be even more plentiful.

Due to a sharp rise in supply, developers and distributors would need to step up marketing campaigns to attract buyers. In the face of vigorous internet development, multimodal marketing campaigns could be launched, providing a colossal volume of information about real estate projects. Developers will apply every tactic to solicit customers, and homebuyers, therefore, might be misled in their decision-making.

Pham Thanh Hung, deputy chairman of CEN Group, however, commented that ‘tempting’ promotions have mostly taken place at projects which have just kicked-off or are under construction.

Customers have become more vigilant. Although they are lost in a maze of attractive promotions, only projects near completion, especially those featuring comfortable living space and other amenities, are their top targets.

This is because at projects that have reached the finishing stage, homebuyers can check the product quality. Especially at projects that are about to be handed over, they can check the living space and service quality as well as infrastructure conditions, a factor that could not be verified at projects in the early stages of construction.

Projects in the finishing phase that are offered for sale at present include Sunshine Palace, Hateco Hoang Mai, Goldmark City, Golden Field, T&T Riverview, Xuan Mai Complex, Eco Lake View, and Valencia Garden. The buyers at these projects have also received attractive promotions, such as compelling service fees.

“Homebuyers should pay attention to projects in the hand-over stage to ensure product quality. Hasty buyers may commit mistakes,” said Do Thi Thu Hang, associate director of Research & Consultancy at Savills Hanoi, adding that in the face of plentiful supply, the buyers must be cautious with their decisions to avoid risks.

Hung from CEN Group, commented that compared to before, developers now pay greater attention to ensuring infrastructure and living comfort at their projects, together with raising service and management quality and promoting marketing.

In addition, to bring projects to the finishing stage, developers must be financially capable. These projects are mostly in the medium and high-end segments in the hands of powerful developers, such as Vingroup, HD Mon Holdings, TNR Holdings, MIK Group, T&T Group, and Sunshine Group.