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NEWS

Fierce competition in mid-end condo segment

06-01-2013

 


Some mid-end apartment buildings are seen in HCMC’s District 4 - Photo: Dinh Dung

Rush to launch condos

Nam Long Investment Corp. is known for its Ehome condo projects targeting middle-income earners. The recently-launched Ehome 3 Saigon West project in HCMC’s Binh Tan District is in its first phase with 333 apartments priced from VND600 million to VND1 billion each under construction.

Nam Long hopes its budget products will lure young families. However, given the market slowdown, the company has cut a deal with Vietcombank to offer homebuyers interest-free loans in order to boost sales.

Specifically, homebuyers can take out loans worth up to 70% of the home value, with a term of 15 years and zero interest rate. In addition, they do not have to pay principals in the first 12 months.

The financial package will relieve homebuyers of their financial pressure. In fact, many customers are struggling as they pay both principal and interest sums until homes are handed over, said Nguyen Vinh Tran, managing director of Nam Long.

The apartment project Khang Gia in the city’s Go Vap District also shares the financial burden with its customers.

Over 320 apartments have been put up for sale at VND11.2 million per square meter, or some VND537 million per unit. Payments will be made in installments over 20 months.

The project owner has joined hands with BIDV to give homebuyers loans worth 70% of the home value with a term of 15 years and a preferential interest rate of 12% per year.

Similarly, the condos of the MBabylon project in Binh Tan District are on sale at a price of VND15 million per square meter, or about VND700 million a unit. Military Bank offers homebuyers loans equivalent to around 70% of the home value over 15-20 years with a lending rate of 12% for the first year.

Being cheap is not enough

Project owners are focusing on prices, especially sales promotions and financial support for their customers. However, not all of them have achieved success.

Some say that it takes more than just cheap prices to lure homebuyers. It is essential that project owners gain the confidence of their customers in order to survive, said Ngo Vi Hung, deputy general director of Sacomreal.

Before carrying out the Carillon project in Tan Binh District, Sacomreal has carefully studied the market and the needs of customers to design appropriate products. In addition, the firm has mapped out a viable pricing strategy based on the actual market situation, and thus it has drawn attention from a lot of customers, he said.

Sharing the same view, Nguyen Van Duc, deputy general director of Dat Lanh Real Estate Co., said project owners were competing in locations, prices, project utilities and especially apartment sizes.

Some apartment projects with prices already slashed by 20% still do not sell well because they are too big and still too expensive. For example, a 40-square-meter flat priced at VND15 million a square meter is a different proposition than one covering 70-80 square meters with a price of VND13 million per square meter, he demonstrated.

“At present, competitive unit price does not guarantee success, but project owners have to pay attention to apartment size, along with other factors,” he stated.

Nguyen Duy Minh, deputy general director of Hung Thinh Land, said property prices had sharply risen and were now brought back to their actual values.

Project owners must demonstrate their capability for project development consistent with capital contribution of homebuyers, he noted.

“Even when low prices are offered, homebuyers would not make a purchase if they did not find assurance in project development,” he added.

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