Luxurious penthouses cannot find rich buyers

Aug 7th at 12:59

07-08-2012 12:59:36+07:00

Though the supply of penthouses is limited with just several penthouses for every block building, penthouses in HCM City still have been left unsold. Especially, the market segment has been narrowed because a lot of investors have given up the game.

Penthouses have been decreasing dramatically in prices, because the demand has plunged in the context of the economic downturn.

Fifteen penthouses at the Thai An 3 and Thai An 4 on Nguyen Van Qua Road of District 12 in HCM City still have been left unsold. In the past, the apartments here were offered for sale at 16-17 million dong per square meter. However, though the prices have dropped to 13 million dong, the products remain unsalable.

Eight months ago, the projects’ developer had to rescue himself by turning the 15 penthouses into 30 standard apartments in a hope to sell them more easily.

The penthouses of high end projects are also unsalable. In 2009, Minh Hoang Real Estate Corporation bought 13 penthouses at The EverRich 1 project, but only several products have been sold. The penthouses here are offered to sell at 21.5-27.5 billion dong.

In the past, penthouses were considered “rare products” and the buyers of the penthouses were defined through lucky draws. However, the golden age of real estate developers is over. Buyers now have a wide range of choices.

The penthouses at The Estella in district 2 in HCM City have been offered for sale at 12.3 billion dong for each. Especially, the seller has promised negotiable prices and best preferences to buyers.

Meanwhile, the penthouses at Xi River View Palace in district 2 are being on sale at 1.2-1.5 million dollars.

In an effort to “liberalize” the capital “buried” in penthouses, the high end products have been offered to sell at the prices which are even lower than the prices of smaller apartments at the same projects

For example, in the secondary market, such as product at Chanh Hung project in district 8 is offered at 12.8 million dong per square meter, while a standard apartment has the price of 18-20 million dong per square meter.

Since the real estate market has fallen into decay, penthouses have become less attractive; real estate developers, when implementing new projects, now consider removing penthouses to make apartments more easily salable.

“We are building high grade apartment blocks in Tan Binh districts and we wonder if we should build penthouses,” said Marketing Director of the Tan Binh Construction and Investment Pham Thi Phuong Lien.

Lien said the market segment has been unceasingly narrowed, while penthouses have been unsalable in the last few years. Therefore, developers always have to have three design solutions to weigh the costs and the investment efficiencies.

Of the three solutions, only one suggests building penthouses, while the other two do not mention the expensive products, because of the too weak demand in the market.

“Penthouses would help increase the value of the projects. However, luxurious products are unsalable at this moment, while the low liquidity would put hard pressure on the investors,” Lien said.

Meanwhile, Montgomery Truong, a senior executive of Savills Vietnam, thinks that one should not look the penthouse market segment with short term vision.

He said that penthouses have been decreasing sharply in prices not only because of the decline in the real estate market, but also partially because of the low quality of the products.

In the golden age of the real estate market, penthouses were built at all residential blocks, including popular or medium-class projects. At that time, it was very easy to sell products.

However, since the market has become frozen, buyers have become choosier, and only perfect products can persuade them to spend so much money.