Property developers launch apartments despite slump

According to Truong Minh Dat, deputy general director of Khang Nam Real Estate Investment Joint Stock Company, although the market remained challenging for property developers, the company felt confident to launch its apartments as it saw a positive feedback about its condo block developed nearby.

The company tried to attract homebuyers to its ongoing development high-end condo project named Terra Rosa – Luxury Condominiums by hosting an exhibition at the department store Diamond Plaza in downtown Ho Chi Minh City on Saturday.

At the same time, the project developer announced to start selling the first apartments of the project. Dat said the company has set aside some VND300 billion to develop the Terra Rosa – Luxury Condominiums project located along Nguyen Van Linh Boulevard in the city’s District 7.

The project has 129 high-end apartments from 120 to 306 square meters, which are designed as duplex units so as to maximise space.

Besides public facilities such as a swimming pool, a tennis court, a fitness center and park, all apartments are designed with a swimming pool outside on the balcony.

The developer lists the selling price at nearly VND18 million ($900) per square meter, and applies a flexible payment method that allows buyers to divide their payment into 29 installments to help buyers.

Dat expected his apartments would be accepted by the market thanks to typical design features, including a private gym and a swimming pool in each unit.

In July last year, Khang Nam launched a condo tower nearby with 366 apartments with prices staring from VND14.5 million per square meter.

Some 90 per cent of all the apartments are sold. That encourages the company to continue to gauge market demand with new luxury apartments.

In another project, Phu My Hung Corporation has started launching 75 penthouses and 13 grounded apartments in Sky Garden 3 and Riverside Residence projects which are located in the new urban town Phu My Hung in HCMC’s District 7.

The company describes those apartments from 165 to 387 square meters as unique products because they are limited in units and having prime locations.

However, the company has not yet announced selling prices of those apartments.

In July, the corporation marked its coming back to the residential market by launching a new condo project named Canh Vien 3 in the new urban town after two years of stopping its sale activities.

The project has two 13-storey buildings with 116 apartments from 119 square meters with the average selling price offered at VND40 million per square meter. Commenting on the residential market in the third quarter of this year, Marc Townsend, managing director of CB Richard Ellis Vietnam (CBRE), said the cash flow continued to be important in the market, and some individual investors are caught with the pressure of their loan interest rate which increased much higher than they anticipated.

Many of them are trying to minimize their loss by selling out their already-bought apartments at a discount compared to the primary prices offered by developers.

According to CBRE, the number of apartments launched into the market decreased significantly in the third quarter of this year, dropping 82.5 per cent against the previous quarter with some 860 units.

Prices in the secondary market continued to decrease across all segments.

The luxury segment saw the largest declines of 2.3 per cent quarter-on-quarter (q-o-q) to $4,230 per square meter, and high-end apartment decreased nearly 1 per cent against the previous quarter to $1,830 per square meter.

Meanwhile, prices in the affordable segment declined a slight 0.1 per cent both q-o-q and year-on-year to $725 per square meter.

With the same view, Savills Vietnam in its market research said affordable apartments with prices ranging from $550 to $1,550 per square meter recorded the highest number of transactions in the last quarter.

More than 70 per cent of the units absorbed in the quarter belonged to the affordable segment, while the high-end segment had an absorption rate of only 4 per cent. Market observers said that although the market received tentative signals of a reduced lending interest rate which may positively impact on the market, purchasing power cannot increase immediately.

Lower pricing and flexible payment terms will thus be used by developers to push sales as many purchasers are waiting for further price reductions.

According to Savills, the HCMC condo market will see 13 apartment projects with some 3,400 new housing units to join the market in the next two quarters.