Villas and land plot sales competing with apartments

Ao Sao, Xuan Phuong and Dai Thanh projects _ illustration photo

Traditionally, villas and land plots in Vietnam have been the most valuable property and their prices have remained commensurately high.

However, due to low sales of villas and land plots, developers have decided to lower their asking price, making it more affordable to those who might otherwise buy apartments.

Recently, the developer of a villa project in Hanoi declared that it would sell villas for between VND1.4 to 1.6 billion ($66,600 to $76,200). Furthermore, the developer was offering a VND200 million ($9,500) discount.

In the New House project located on the outskirts of Hanoi, the developer has priced villas as low as VND8 million ($380) per square metre. This price is even cheaper than most units currently on Hanoi’s property market, which mostly range from VND15 to 20 million ($710 to $950) per square metre.

Land plots on the fringes of Hanoi’s central business district such as on Dai Co Viet and Tran Khat Chan are being sold for between VND30 to 35 million ($1,400 to $1,600) per square metre. Those prices, although slightly higher than other land plots, are in line with the pricing of apartment projects nearby.

According to CBRE Vietnam, during the first quarter of this year, the land plot sector saw signs of growth, because many developers had reduced their prices to entice customers.

There were no new housing project launches in the first months of the year, apart from the re-launch of the Ao Sao, Xuan Phuong and Dai Thanh projects whose housing prices range from VND2 billion to VND3.5 billion ($95,000 to $166,000).

CBRE also noted that some recently-launched projects are applying attractive prices that undercut the pricing of many condominiums or residential land in the same district. For example, the Ao Sao project is being sold at VND20 million ($950) per square metre; Dai Thanh from VND26 million ($1,200) per square metre; and Tan Tay Do which is only VND13 million ($620) per square metre.

“This illustrates the emerging trend that the housing market is competing directly with low- to mid-priced condominiums in the VND2-3 billion bracket,” said CBRE.

Land plots in Nam Anh Khanh’s new urban area are now being sold for VND18 to 20 million ($860 to $950) per square metre.

Meanwhile, prices in the Le Trong Tan – Hadong urban development project are only VND15 million ($714) per square metre. This price was reduced by more than 50 per cent compared to 2010.

Price reductions have also been recorded in projects with little activity in the outlying districts of Hanoi such as Me Linh and Quoc Oai.

In an attempt to promote sales, developers are now offering unprecedented payment terms. For instance, buyers in the first phase of Gamuda Gardens (part of Gamuda City) can now move in after payment of the first 20 per cent. The remaining 80 per cent can be made over four years at zero interest.

According to figures from Ministry of Construction, Hanoi now has more than 3,000 unsold low-rise villas. Those villas are mostly in projects far-removed from the city centre, and often are without vital infrastructure. Such projects include Nam An Khanh, Van Khe, An Hung and Kim Trung – Di Trach.

Figures from the Ministry of Construction reveal that Hanoi has recorded more than 2,300 successful transactions across the entire property sector in the first quarter. In the same period, more than 1,500 villas were sold, which is double the amount compared to the same period of last year.