Falling housing prices propel sales
Falling housing prices propel sales
Falling real estate prices are actually the reason many developers have survived the downturn, said a report sent to the National Assembly by the Ministry of Construction.
According to the Ministry of Construction (MoC), property prices have fallen to levels last seen seven years ago, before the boom.
“Apartment prices have greatly reduced compared to 2008-2010. Most projects have seen a decrease of 10 to 30 per cent, some have fallen by half,” read the report, which also pointed out that small, ready-to-use apartments costing less than VND15 million ($715) per square metre were now the most desired by buyers.
The MoC also reported that the current total value of unsold apartments throughout the country stands at $4.8 billion thanks to increasing purchases of small and finished apartments. The figure in the first six months of the year was 20 per cent higher.
“There are still challenges the market must face, but we are looking at an upswing in the first nine months of this year as confidence slowly improves. Many transactions for social housing and small apartments have been conducted successfully,” the report said.
Compared to the previous two years, the number of transactions is still low but for the small apartment segment, liquidity is high and transactions are on the up.
The report also indicated that even more and more projects were finished and ready for sale, unsold properties in the two major cities of Hanoi and Ho Chi Minh City were decreasing.
In Hanoi, unsold real estates were estimated at VND14,487 billion ($690 million) in July this year, down 15 per cent compared with June.
In Ho Chi Minh City unsold properties were valued at just over $1 billion, down 16.1 per cent.
These results prompted the MoC to announce that the national housing development strategy has achieved positive initial results.
Reducing prices have been the top priority for developers to survive the current slump. Many have also offered incentives to buyers.
According to CBRE Vietnam, in the third quarter this year residential projects were more cautious with only 1,900 units released, 6 per cent down against the same period last year.
Primary prices also continued to go down, with some developers lowering prices by 10 per cent from previous launches and up to 50 per cent on new launches.
The number of units put up for sale in Hanoi in the third quarter of this year totalled 1,900 units.
In Ho Chi Minh City unit launches continued to rise this year with 1,726 units in the third quarter, increasing 45.8 per cent on quarter and 11.6 per cent on year.
The majority of this supply was in the affordable segment, making up 74.7 per cent of new launches. High-end came in second with 19.3 per cent and mid-end last with 6 per cent.
Developers’ faith in the market was rewarded as new launches saw notable buyer activity, according to CBRE, which also confirmed that prices in Ho Chi Minh City continued to fall, but at marginal rates.
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