Gloves to come off in fight for new buyers

Speculators are staying aloof from the high-end apartment market

Several years ago, the capital city had a few of high-end condominium projects such as Indochina Plaza Hanoi, Keangnam Hanoi Landmark Tower, Sky City Towers. However, this year the market will experience the mushrooming of high-end condominium projects focusing in Cau Giay, Hai Ba Trung, Thanh Xuan, Ha Dong, Tu Liem and Hoai Duc districts.

Mai Linh Investment Joint Stock Company last week started construction on its 1,000 units Golden Palace project on Tu Liem district’s Me Tri street, which is expected to sell for more than $1,800 per square metre.

Not far from the project, thousands of high-end apartments from the Thang Long Number One, Dolphin Plaza, Mandarin Garden project are competing for buyers.

Among them, Thang Long Number One project was launched by the end of last year and Mandarin Garden project was planned to be launched soon. Each project is designed with around 1,000 units.

At 378 Minh Khai street, Hai Ba Trung district, Daewon-Thu Duc House had also announced that it would start constructing five high-end apartment blocks and an office building of 18 to 22-storeys this year.

In the same district, South Hanoi Urban Development Joint Stock Company planned to launch its 37-hectare Eco City project in the second quarter at estimated prices of $1,500-$1,700 per square metre.

Two more projects will be launched in Ha Dong this year, including the 4,600-unit Cleve and 928-unit Hyundai Hillstate.

The new projects will join a saturated high-end apartment market, which already welcomed large projects such as 4,000-unit Royal City and 1,500-unit Mulberry Lane.

A quick research by VIR has shown high-end projects in Hanoi will provide a stock of some 23,000 units this year at prices of more than $1,500 per square metre.

As the supply of high-end apartment market grows quickly, competition for buyers is expected to get stiffer.

Even the Royal City, developed by Royal Real Estate Investment and Development Joint Stock Company, which surprised all of people working in real estate market because of its announcement of selling out 1,892 units within several months last year, it still has more than 2,000 units finding their owners.  

The government’s credit tightening, high inflation and interest rates, speculators’ absence from the market and the devaluation of dong against the US dollar have all discouraged buyers from  high-end products.

Tran Dang Khoa, general director of Mai Linh Investment, said: “With the present macroeconomic climate, I’m sure that all developers face challenges. There will be winners and losers. Some of projects will see sluggish sales results and prices decline.”

Khoa said that the company would try to differentiate its Golden Palace project to attract customers.

Indochina Land’s sale and marketing director Michael Piro said in today’s competitive market, all developers must continue to be innovative by offering attractive developments concepts, buyer incentives should be secondary.

“We have offered some minor incentives such as promotional discounts on select units. However, our core offering is a quality product, great location and superb design. These fundamentals have driven the success of our sales program to date and will continue to be the reasons for purchasers to choose our projects.

“Developers should consider working with banks to put together attractive financing packages to support purchasers along with flexible payment terms,” added Piro.