Apartment market cools for buyers

Speculators have knocked buyers off their stride in the past

While high-end apartment project sales remain slow, mid-end apartments have been hunted by customers. Among those are the PetroVietnam Premier Creation Joint Stock Company’s Hanoi Time Tower in Ha Dong district.

The company recently sold off 120 units in its two buildings after a few days of launching, with the starting price from VND19.2 million per square metre (exclusive of VAT).

Since October 15, Nam Cuong Group has also sold off more than 400 apartments in its Le Van Luong Residentials in Ha Dong district, with the price ranging from VND21-24 million per square metre.

Buyers in Hanoi are gaining easier access to residential market, which was previously driven by speculators. More developers are inviting customers to directly sign purchasing contracts with them.

Reasonable prices are also attracting customers and more incentives are on offer. Many developers are offering customers with eight payment instalments, compared to four previously.

Increasing supply trends also mean the market is awash with buying options.

Professor Dang Hung Vo, former natural resources and environment deputy minister, said increased supply would likely to reduce prices and increase consumption.

Vo said most of the construction projects started in 2010 would be completed by 2012.

Although it is far from the saturation point, Ministry of Construction figures revealed that more than 800 residential projects are being executed in Hanoi, with thousands of apartments to be launched.

Next year, the construction of an additional 252 apartment projects will be undertaken, expected to provide nearly 8,000 more apartments for the city.

A range of new urban area projects such as Phung Khoang, Van Phuc, Van Khe, Duong Noi, An Hung, Park City and Mo Lao have been built along extended Le Van Luong Road.

Along the Thang Long avenue, there is a series of new urban areas such as Tay Mo-Dai Mo, Geleximco, North An Khanh, South An Khanh and Van Canh. Hundreds of apartment blocks are also being built in the districts of Cau Giay, Tu Liem, Tay Ho and Ha Dong districts.

It is also said that two big projects will be launched soon next year, including a 6,440-unit project developed by Korea’s Posco E&C and Vinaconex and a 1,000 unit Mandarin Garden developed by Hoa Phat Group.

Pham Thanh Hung, deputy general director of Cen Group said, although many people were talking about a possible glut of apartment supply in the market, the number of apartment complexes launched so far was still extremely modest compared to demand. While some under construction projects are selling slowly. Completed apartment projects have seen prices increase year after year.

However, it is not all roses. Apartments, which are priced at more than $2,000 per square metre in Tu Liem, Cau Giay or Thanh Xuan districts, and more than $1,500 per square metre in Ha Dong district or other suburban districts are still struggling to sell.

No developers have announced discounts to individual buyers as we have seen in Ho Chi Minh City more than a year ago. But in fact, developers of these luxury apartments have offered discount of 5-10 per cent for a group of buyers or offered free car parking and furniture for the condominium.