Buyers' faith restored in property market
Buyers' faith restored in property market
The improving economy together with significant progress in infrastructure has revived buyers' confidence in the residential sector of the property market, according to real estate services provider CBRE Vietnam.
The US-headquartered firm's research and consulting associate director Duong Thuy Dung told the media yesterday that the further reductions in bank deposit rates in March could lead to lower lending rates which might encourage people to put their money in other assets like property.
The positive economic factors include a GDP growth rate of 4.96 per cent, slightly higher than the rates in the last three years.
"Although strong signs of recovery have not been seen, there were certain positive economic indicators, with the Viet Nam Asset Management Company (VAMC) and the VND30 trillion (US$1.43 billion) credit package showing good progress," Dung said.
"The VAMC planned to buy up to VND100 trillion ($4.76 billion) worth of bad debts by issuing special bonds in Q1 and also drafted a plan to sell bad debts at market rates to interested investors."
The government housing package for social housing has seen VND1.32 trillion ($63 million) disbursed to 3,023 customers, a 64 per cent rise since December.
Moreover, a credit package worth VND50 trillion ($2.4 billion) based on a partnership between investors, contractors, building material suppliers, and four local banks with support from the State Bank of Viet Nam will be available to the sector very soon.
She also cited the improving stock market as a supportive factor in the growth of the residential sector.
Those positive signs translated into a sales increase of 9.8 per cent quarter-on-quarter and 92.2 per cent year-on-year to approximately 2,600 units in HCM City in Q1.
The affordable and high-end segments made up the largest proportion with 40.5 and 36.2 per cent of the sales respectively. This suggests that buyers are returning to the market in both the high and lower ends of the market.
The quarter also saw a strong increase in the number of new launches.
Interestingly, all the new projects are in the high-end and mid-level segments. The high-end segment accounted for 42.4 per cent of the newly launched units and achieved a good sales rate (80 per cent at Green Valley and over 70 per cent at Icon 56).
"For the first time after many quarters, the market again witnessed popular pre-launch activities," Dung said.
"Developers have introduced their projects one or even two months before the official launch. This is a way to market the projects and test the market's reaction. Q1 2014 witnessed the pre-launch of Galaxy 9, Hung Ngan Garden, and Topaz Garden."
Secondary market prices have continued to trend down since 2011. The high-end segment recorded the strongest decrease at 2 per cent quarter-on-quarter and 5 per cent year-on-year.
Incentives on new properties such as long payment schedules (up to two years) combined with promotions (gold, car, waiver of management fees) have forced re-sellers to cut prices to stay competitive.
Dung expected primary prices to remain stable and secondary ones to further decrease.
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