Sellers cut apartment prices for capital recovery

A unit at Westa Apartment Building under construction in the capital’s Ha Dong District costs VND16-17.9 million ($768-859) per square meter at the moment, 30 percent lower than one year ago, according to new quotations announced by local trading floors.

A trading floor which sells many apartments of another project in Ha Dong says it is offering a wide range of discounts to buyers.

“Purchasers can pay VND20-100 million ($960-4,800) less for an apartment now,” one of its agents says.

Speculators, who buy properties from developers to resell them for profit, already took around VND2 million ($96) off the original unit price at Tan Viet, a housing development in Hoai Duc District, closing it at VND12-13 million ($576-624) per square meter.

In Ho Chi Minh City, apartment prices also plummet as trading floors and resellers have joined a markdown race to lure customers.

Units at Bay Hien Tower in Tan Binh District are currently 33 percent cheaper than a year back as its developer Long Hung Phat now offers VND16 million ($768) per square meter.

Dealers Dai Tin A Chau and An Binh Land demand VND18.2 million ($873) per square meter, a 30 percent cut, for 120 units they bought at Hoang Anh River View in District 2 while Nhip Cau Dia Oc which purchased wholesale a number of apartments at Carina Plaza in District 8 is selling them at VND13.2 million ($633) a square meter, down 15 percent from March.

Developers of several other projects in Go Vap, Tan Binh, and Nha Be also cut their prices by 5 to 12 percent.

Cutting losses

Sellers say they have to decrease prices to cut losses and recover investment because they can no longer wait for a market comeback.

“Cutting prices will help us recoup investment as waiting for a market recovery appears to bring no future,” Pham Xuan Ai, An Binh Land director explained. “We need money to do other business.”

Nguyen Ta Phuc, Long Hung Phat director, said it is impossible to maintain the old high prices when the real estate market is in deep recession at the present time.

Pham Ngoc Lam, board chairman of another company, admitted recouping investment is a priority to many businesses given current financial difficulties.

The director of a major property firm in Ho Chi Minh City said a wrong pricing policy would lead to a capital shortage as bank loans are inaccessible to businesses now.

So developers now focus on the completion of each project to quickly get back what they have invested instead of trying to build as many at the same time as possible like previous years, board chairman Lam added.

“End-users will benefit as the economic slowdown is forcing developers to offer a ‘true’ price for their products,” an expert said.