Cut-priced condominiums today’s reality

Nguyen Manh Hung, a staff member in a housing transaction centre in Hoang Ngan road of Hanoi, said the credit shortage had prompted a fire sale of condos.

Even though the prices have reduced since the end of last year, for total of around 25 per cent, Hung expected that another round of reduction would come soon, for another 10 to 15 per cent more.

Since the end of 2011, the first round of reduction in  condo prices were seen in Ho Chi Minh City. Pilot developers were Sai Gon Mekong which reduced the price of 500 units in a development in District 7 to VND14.5 million, from the initial VND18 million per square metre.

The next wave of reduction came from developers  Dai Tin A Chau and An Binh Land companies which brought 120 units from Hoang Anh River View, then resold  recently at VND18 million, from the initial VND28 million per square metre.

In Hanoi, Mai Linh Investment Company cut prices ranging from VND2-9 million for every square metre in its Golden Palace in Hanoi’s Tu Liem district.

Other projects with reductions include Nam An Khanh low-residential, 25 Tan Mai Building, the Song Da-Ha Dong Building and Thang Long Garden.

Most recently, Westa project in Mo Lao New Urban Area in Ha Dong district has reduced prices by   35 per cent compared to the previous price of VND26 million per square metre. Other projects joining the trend include VP3 Linh Dam which has reduced prices twice, from VND31 million early this year, to VND25 million mid this year and around VND22 million per square metre now.

According to Dinh The Hien, the director of the Institute for Computer Science and Applied Economics, the price reductions, especially from secondary investors, was a positive sign for the market.

“This reduction would make the current products in the market come closer to the reality and pave way for many people to have opportunity to approach accommodation,” Hien said.

Nguyen Van Duc, deputy director of Dat Lanh Real Estate Company told VIR that he believed that the price of condos would be further reduced until the end of this year, with an expected reduction of 30 per cent more.

“I hope that developers like us could sell out our products with this reduction  and the market could be better at the end of next year,” Duc said.

Duc advised developers to divide their units into many small units and save the construction expenses, in order to have a more affordable product to offer to buyers.