Door is still closed to condo sales
17-09-2012
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Nguyen Manh Ha, director of the Ministry of Construction’s (MoC) Housing and Real Estate Market Department, said that Hanoi was facing the largest stockpile of condos, especially ones built in city’s outskirts
Because of the oversupply, almost all segments have been declining in price, especially the higher-end units which are sold in the prices of VND25 million per square metre upward.
Economist Vu Dinh Anh said Hanoi and Ho Chi Minh?City had around 60,000 units unsold and that if every unit was valued at a modest price of VND1 billion, then more than VND60,000 billion ($2.86 billion) was sank in those unsold units.
The stockpile of condos in major cities was so serious that the MoC in the beginning of September required local construction departments to report on the figures and status of their local enterprises.
Since April 2011, the government’s effort to fight inflation and to restrict non-productive loans has almost ground the real estate market to a standstill, with many projects delayed, halted or sold.
These factors put downward pressure on the residential prices.
Moreover, the real estate downturn has taken many other sectors directly or indirectly downward as well, such as real estate services and construction materials manufacturing.
According to Hanoi Construction Department, more than half of real estate transaction centres have closed because of too few services were reported.
Meanwhile, according to financial reports of 26 listed real estate companies, their capital of stockpile products reached a value of more than VND36,000 billion ($1.7 billion) in the first six months of this year.
According to Anh, a different trend had occurred in Vietnam where “luxury brands are brought to sell in rural areas”. That means in recent years developers were building too many high-end condos that people could not afford.
“Demand is still there, however condos’ prices are now over their budgets and they can not buy a unit even after 20 years of saving,’ Anh said.
In order to increase liquidity and lower the condo’s prices, Ha said developers can consider redesigning the current stockpile units into smaller ones and use cheaper materials.
All apartments segments have experienced a downward trend in prices, according to Colliers.
“Currently, most buyers in Vietnam are investors or speculators (60-70 per cent). However, when apartment prices approximate the real value and more affordable products are introduced to the market, the proportion of end users will rise,” the report said.
Tags : house for rent in hanoi - apartments for rent in hanoi
