HCM City fire hurts condo market
The deadly fire that occurred at the Carina Plaza tower in HCM City on March 23 is likely to set back the apartment market but only for a short period, experts forecast.
Le Hoang Chau, chairman of the HCM City Real Estate Association (HoREA), said the fire had an impact on the market but the effect would wear off soon for three reasons.
Firstly, living in apartments is inevitable in a modernising society, he said, pointing to Singapore, where some 85 per cent of the population lives in apartments. The rate is 60-70 per cent in EU and North American countries.
The second reason, Chau said, was that demand in every apartment segment had been rising. Last year demand in the mid-range segment was in the hundreds of thousands, he said.
Finally, rather than hitting the market itself, the Carina Plaza fire has only raised public awareness of the dangers of fires and forced developers and authorities to improve fire safety systems in buildings.
“It is profitable for developers, residents and the community as they can live in a safer environment.”
Concurring with Chau, Trang Bui, head of markets at property consultant Jones Lang LaSalle (JLL) Viet Nam said developers were re-examining fire prevention systems and the functioning of building managements.
Buyers had begun to ask for fire prevention systems when buying condos, she said.
Meanwhile, authorities were cracking down on failure to instal fire safety systems in new buildings and raising efficiency norms for approval.
Pham Lam, general director of DKRA Joint Stock Company, was quoted by vnexpress.net as saying that the market had been hit in the aftermath of the fire but he expected the situation to normalise soon.
"Apartments are the preferred choice of residence for many, especially young families and people with medium incomes," he said.
Now, because of the fire, apartments with good fire safety systems would sell well, he said, referring to another fire in an apartment block in District 2 that was quickly put out by the firefighting system.
Duong Thuy Dung, senior director, CBRE Vietnam, said: “Developers may slow down their sales plans by three to six months. They will undertake activities to assuage buyers like commitment to fire safety systems.”
But buyers would be cautious, she said.
At the end of last year her company had predicted that around 40,000 apartments would be sold in 2018, but the recent fire would have an impact and the figure could now be below 35,000, she said.
“It will affect the low and medium segments.”
Around 9,500 units have come into the market so far in the first quarter, 79 per cent higher year-on-year.
HoREA said since September 2016 there had been 34 fires in buildings, 26 cases in apartment buildings.
Last year the city suffered from 1,007 fires which killed 26 people and injured 44 others.
The worst ever apartment fire in the city was at the Carina Plaza in District 8 last month in which 13 people perished.