Apartments in Hanoi thrown to the floor

“The 2011 and 2012 crisis is even worse than the 2008 crisis in terms of length and magnitude,” said CBRE executive director Richard Leech. If the primary prices continued at a low level with 100 per cent of newly-launched units priced below $1,500 per square metre, the secondary market’s asking prices were at its largest quarter-on-quarter drop since its straight fall from 2011’s second quarter.

CBRE reported that secondary prices of landed properties were still on a downtrend in most projects across different districts. In western Hanoi, Cau Giay, Tu Liem and Hoai Duc districts are suffering from 5 to 25 per cent price decreases.

This figures are 20 per cent in the south-west Hanoi in Hadong district, 10 per cent in Long Bien district and strongest decreases of up to 30 per cent quarter-on-quarter were recoded in the northern Me Linh district where construction progress is low.

Nguyen Manh Huy, head of Tac Vang Company business development, said few developers have announced price reductions in the secondary market and many investors and speculators were struggling to sell apartments with prices 20 to 30 per cent lower than those they bought from developers. He said speculators and investors accepted to sell apartments with the lower prices than those quoted by developers seen in most projects in Hanoi.

CBRE figures showed there were only 17,300 units supplied to the market in 2010 and this figure increased to 29,120 units in 2012. In the second quarter of 2012, more than 1,700 units were newly launched, a slight pick-up from the cautious launch of 1,100 units in the first quarter.

“This supply growth was mostly attributable to developer’s anticipation of improved market sentiment following the series of interest rate cuts from 14 to 9 per cent in just three months. However most developers still remained cautious, since the 3,000-unit new supply in the first half of 2012 was modest compared to 25,000 units released in 2011, the CBRE quarter report said.