Ways out for apartment sale in tough times
28-08-2012
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Launching products
Statistics of Jones Lang LaSalle Vietnam show that the number of apartments put up for sale is on the rise after interest rates are lowered. Specifically, in the last two quarters, some 1,200 apartments were launched in HCMC.
Apartment supply rises significantly in the third quarter with multiple condo projects opened for sale. Most of these projects are near completion, or can hand over homes to buyers within this year, and in the mid-end segment.
On May 26, Gia Dinh Real Estate Investment Co., through Hung Thinh Land as a broker, began to offer the condo project Nguyen Thuong Hien located at the corner of Nguyen Thuong Hien and Tran Binh Trong streets in Go Vap District, HCMC.
The project consists of two 12-story apartment blocks with 264 units priced from VND960 million each. The entire 90 apartments put up for sale were bought on the first day of offering.
As planned, the apartments will be handed over to buyers in the first quarter of next year.
Nguyen Duy Minh, deputy general director of Hung Thinh Land, said that although the housing demand is surging in line with urban development, not anyone can afford to buy himself a flat. Therefore, the condo projects aimed at end-users with low prices and flexible payment methods, especially those in preparation for handover, still attract attention of customers.
Minh said his company was quite successful in the sale of The Harmona project on Truong Cong Dinh Street in Tan Binh District on August 12. Over half of the 90 condos priced at VND1.5 billion each have been ordered.
The project developed by Thanh Nien Joint Stock Company includes three blocks with some 570 apartments, set for handover in the fourth quarter of this year.
Similarly, An Gia Real Estate Investment and Development Co. and its two partners Khang Gia and Danh Khoi on August 25 opened for sale an apartment block of the building complex Khang Gia-Go Vap on Phan Huy Ich Street in Go Vap District.
More than 320 apartments are offered at the price of VND11.2 million per square meter, or some VND537 million per unit. Payments will be made in installments within 20 months.
Nguyen Ba Sang, director of An Gia, expected the project will sell well because the apartments are priced reasonably, appropriate with middle-income earners.
… and waiting for banks to lower prices
Many companies have been lowering apartment prices in a bid to stimulate the weak purchasing power. Still, real estate firms said they would not directly offer discounts of tens of percents, as this method would downgrade their projects.
A senior source from a property company described direct discounts and excessive promotions as a two-edged blade, which can stimulate the purchasing power but also can make buyers hesitant and wait for further discounts. Therefore, many firms have chosen banks as intermediary to slash prices via interest rate support programs for buyers.
In this way, investors can reduce the number of unsold products while banks are praised for good lending policy. As such, customers of a number of projects have recently been offered very low lending rates, even at 0%.
For instance, Vietcombank offers customers of Indochina Plaza Hanoi interest-free loans for 15-year terms. In addition, many investors have announced preferential programs for homebuyers with 0% interest rate for 2-3 year terms.
In other words, investors will pay bank interests on behalf of their customers.
Nguyen Phuoc Thanh, general director of Vietcombank, said there are now many programs with preferential interest rates for homebuyers. The burden of soft loans is not shouldered by lenders alone, but shared by them and project owners.
With Indochina Plaza Hanoi, Vietcombank provides an interest rate of 12% in the first 12 months for loans disbursed prior to September 21, and then the interest rates will be calculated in accordance with current regulations, said Thanh. The interest rate of 0% is given as a way for the project owner to assist customers and thus quickly sell products, and in this case, the developer bears all interest sums.
In addition, there are home loans with interest rates of 7-8%, but banks actually offer 12-14%. The gap will be covered by investors, said Thanh.
Owners of property projects have chosen this method to reduce the interest burden on homebuyers and tackle their inventories.
