Ciputra sales stable despite weak market

Think big: Ciputra is still seeing strong sales of its luxury homes, despite a weak market

Ciputra sold 400 houses and 300 apartments in the first phase of the development and has begun work on the 148 hectare second phase, which will comprise 250 villas and five apartment towers.
Although the developer, Citra West Lake City Development Company, has raised apartment and townhouse prices since the first phase, the villa area has already sold more than half of its units.
The townhouses are now selling at $1,600 to $1,700 per square metre, compared to $1,250 during Ciputra’s first phase.
The developers have also raised the prices in the two Parklane apartment towers, and buyers have registered to purchase over half of the 300 units at $850 per square metre even though the foundations have only just been completed.
Company director David Arnsdorff said the Parklane apartments are a higher standard than those in the first phase, which sold for $600 per square metre.
The towers are located next to an 80ha park with greenery and water features, and the developer said the property is tastefully designed to create a luxurious living environment with four private elevators opening directly into each unit, which also include a servant’s room.
The Parklane has swimming pools, tennis courts, restaurants, a fitness centre, minimarts and private basement parking. It will have two 279sqm and 334sqm penthouses.
Arnsdorff said that business was better in the past three years and that interest had recently slowed down.
“Sales activities are still ok,” he said.
Buyers are becoming more sophisticated, he said, and they are beginning to understand locations and good views. Buyers have registered all the best-facing units of Parklane with little concern about prices.
“The best facing units were taken up very quickly. Buyers even want to wait for the next buildings to buy the best aspect,” he said.
Dang Hung Vo, deputy minister of natural resources and the environment, said quality apartments continued to attract buyers but the sale of land and houses with attached land use rights had slowed down in many areas due to their high prices.
“In the past, there was speculation on houses with attached land use rights as there was a huge demand for this kind of property. However, speculators no longer want to buy because land prices are falling,” Vo said.
Vo said those who buy land and houses as investments were also weary. In the past few years, these people have gone to suburban areas to purchase property in the hope of high returns but they are reluctant to buy now because prices are falling.
Arnsdorff said buyers were waiting to see what the market will do.
“The buyers are confused, because they see many projects in difficulty. They are waiting for prices to drop,” he said.
Many local developers are facing a cash-flow crisis, as buyers are reluctant to put down deposits in a stagnant market and banks are also cautious about property loans.
Other developers are unable to maintain the sales momentum they achieved over the last three years and are reconsidering prices. Buyers are now finding that prices are more negotiable and payment terms are more flexible than ever before.
Vo said the market was now correcting itself after a three-year period of unnatural growth.
“The real estate market has peaked. Land prices skyrocketed, and that pushed up house prices,” Vo said. “It is good to see land prices in decline.”
He said there was still a high demand for houses in the local real estate market. Arnsdorff agreed, and claimed that Hanoi needs more houses to accommodate a growing population that will probably double in the next 10 years.
Arnsdorff said if people from outside Hanoi were allowed to purchase houses in the city, the entire market would grow. A lot of people from Haiphong, Ha Tay and Ha Long have expressed interest in Ciputra.
“The demand for houses is there,” he said.
He said the company will launch another villa compound this year and build four more apartment towers in the second phase.
The Ciputra complex will build a total of 1,200 houses and 9,000 units, along with a shopping mall, hospital and school on 300ha of land.




No. 751/March 6-12, 2006