Property prices to continue decline

Property prices to continue decline

Apartment prices in Ha Noi could fall even further between now and the end of this year, according to the General Statistics Office, which has reprorted that the capital city currently has a glut of about 3,500 unsold apartment units.

Real estate developer COMA 18 has cut prices for luxury apartments in Westa Tower to VND17.9 million (US$852.3) per sq.m for unfinished units and has joined with the Sudico Property Trading Floor to offer discounts to Westa buyers. The price of one Westa unit on the trading floor was 28 per cent below its initial offering price.

The prices of more affordable apartments has also declined despite higher demand for this class of properties. One apartment in Tan Viet Tower in Ha Noi's Hoai Duc District fell from an initial offer price of VND15 million to VND12-13.5 million ($571.4-642.8) per sq.m.

Viet Nam Real Estate Association general secretary Phan Thanh Mai said current prices were already below the pace of investment, suggesting that the market was in a state of inefficiency. However, a variety of economic pressures were causing real estate developers to reduce prices in order to cut losses and recover capital to service debts, he said.

But Navigat Real Estate Consulting Co director Dang Van Quang suggested that the market has long been inflated and that prices needed to continue declining to put ownership within the reach of more people. Meanwhile, Quang urged property market regulators to review policies on land use rights, land clearance compensation and credit in order to try to reinvigorate the market.

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