Discount trend continues in apartment market
17-07-2012
 An apartment project is seen on Hoang Dao Thuy Street in Thanh Xuan District, Hanoi - Photo: Thoa Nguyen |
Particularly, the latest report of Knight Frank on the property market of Hanoi indicates a slight price fall in the low-end and mid-end apartment segments and a sharp drop in the high-end segment last quarter. Owners of the projects from above mid-grade to high-grade continued to pull down their selling prices by 6-19% to lure buyers.
Meanwhile, 12% was the average discount rate in the primary market, while the secondary market offered products at 11% lower prices, according to the data of CBRE.
The data of Savills Vietnam shows that apartment asking prices in the primary market ranged between VND16.5 million and VND64 million per square meter. The average secondary prices went down in all districts, in which Hoang Mai District saw a 7% price decline and prices in other districts dropped 4-6% against the preceding quarter.
Although the offering prices are said to be returning to the reasonable levels in all segments, the average absorption rate dwindled by 8% in the second quarter, staying at 15%, as the liquidity of most projects did not improve much.
A source from the market research division of Savills said the apartment market in Hanoi welcomed ten new projects last quarter, supplying an additional 4,200 units, taking the total supply to approximately 12,000, a rise of 23% on the first quarter.
As such, apartment supply is increasing, while homebuyers are more prudent in making trading decisions. This will exert a huge pressure on businesses.
Tran Nhu Trung, deputy director of Savills, noted the Government’s efforts to prop up the real estate market by credit supports and lending rate cuts had not significantly affect consumers’ home purchase.
He stated changes in macro-economic policies are only the necessary condition to draw more attention to the housing market. To improve the market trading situation, there must be many other factors.
Le Minh Dung, director of CBRE Vietnam, informed many project owners had cut losses and would continue to do so in the coming time to make investment in other segments. This might be the right time for consumers to buy houses.
However, the biggest difficulties in recovering the market are that consumers have yet to regain their confidence, buyers find it hard to access capital and project owners are still cautious with the market.
To improve the dreary trading situation since the previous quarters and attract buyers, project owners are trying to slash prices by offering discount packages and promotions as well as encouraging buyers to make payments ahead of schedules to enjoy higher discounts. In addition, homebuyers are given many options, such as receiving fully-furnished or bare houses, meeting their demand and financial capability.
The bright spot in the reports is project owners expect more optimistic trade volumes in the third quarter when macro-economic policies are put into practice.
Meanwhile, consumers hope to receive home loan supports from the Government. Hence, the property market will be able to improve after running into many problems over the past time.
