Some developers colour a black trend

And some strategies have succeeded. Doubts that the developer of Dai Thanh urban project in Thanh Tri district of Hanoi had really sold hundreds of units during the last two months have been dispelled by the busy day-to-day activity in the Muong Thanh transaction floor, where low prices were attracting strong interest.  

Hundreds of its apartments were sold at prices ranging VND10 to 13 million ($476 to $620) per square metre, about the prices of projects built for low-income earners. Meanwhile, the developer is narrowing the sizes of apartments to improve purchasability, with units ranging from 36-50sqm, meaning buyers will have to pay less than VND400 million ($19,000) for an apartment.

Sails Tower in Ha Dong district of Hanoi is also gaining from low-pricing tactic. In just two weeks since it started sales in October, 58 units at Sails Tower were sold, and market observers view the figure as a good sign in such difficult situation of the real estate market.

Despite not being priced as low as Dai Thanh’s apartments, Sails Tower units, sold at   about VND16 million ($760) per square metre, are still  considered relatively cheaper than many other projects being on offer in Hanoi. Additionally, the developer also market small partments starting from only 46sqm to make them more affordable.

According to Nguyen Trung Vu, chairman of Cen Group, projects like Dai Thanh and Sails Tower have been sought by customers because not only they are designed in small sizes and offered at relatively lower prices, but more importantly, the developers have been able to convince buyers with their product quality and timely construction progresses.

One of the most important factors hindering sales at the moment, Vu said, was that buyers were often doubt ful about the developers’ ability to finish projects on schedule.

In reality, construction of many housing projects have been delayed due to developers’ financial difficulties, resulting in buyers’ eroded confidence in the ability of the developers to complete the buildings on time.

To win over its customers, Sails Tower started to be sold after its frame was finished. This contrasts sharply from many other projects that open sales after finishing the basement.
Sails Tower’s finished apartments are expected to be handed over on schedule by  September 2013.

Sails Tower is also backed by Lien Viet Post Bank with mortgage loans amounting to 70 per cent of the apartments’ values in 15 years.

Some higher-end projects have also gained successes. Indochina Land, the developer of Indochina Plaza Hanoi, reported sales of  36 units over the last two months with the price starting from VND52 million ($2,470) per square metre, or VND5 billion ($238,000) per unit.

The firm said it has won over customers by maintaining international standards, timely construction progress and supporting facilities such as a trading centre, restaurants and entertainment areas.

Moreover, the developer offers various incentives for buyers, including a full subsidy of mortgaged loan interest in the first year.