The buyers are now the gods

The owner of the 40-storey building Time Tower in Ha Dong district in Hanoi has luckily sold the apartments he intended to sell. A lot of investors have purchased apartments in large quantities. The quick sale of the apartments seems to be a big surprise to many people, who think that houses are selling very slowly due to the low demand.

According to secondary investors and real estate experts, one of the key factors that have brought success to the sale campaign is the method of payment. The apartments have a really attractive initial price of 19.2 million dong per square meter, not including tax. Meanwhile, buyers can make payments in six stages and they can pay in Vietnam dong.

Tran Thanh Nam, Director of Nam Thanh Real Estate Center in Cau Giay District in Hanoi, said that the increasing dollar and gold prices have hindered transactions. The higher prices of dollar and gold have made real estate products become more expensive, that is if the prices are set in dollars.

In October and the first days of November, the dollar price increased by 1000 dong per dollar, which has made each apartment more expensive by hundreds of millions of dong. Therefore, offering promotion campaigns, allowing payment extensions or setting sale prices in Vietnam dong instead of dollar are methods real estate developers have been using to entice buyers.

In fact, real estate developers do not intend to slash sale prices, because the move will cause losses to customers who purchased the products before. They only offer preferences to new buyers. Some real estate developers have cooperated with banks to provide loans to buyers. Customers only have to pay interest rates when they get deliveries. Besides, customers have also been promised to enjoy reductions in management fees or parking fees.

The most popular method applied by most real estate developers is accepting several methods of payment . The buyers of the apartments at Giang Dien ecological urban area in Dong Nai province, for example, can pay in seven stages. Meanwhile, the buyers of Unitown’s apartments in Binh Duong can pay in 29 different stages within six years.

For example, the developer of Mulberry Lane project in Ha Dong district is planning to lower the sale price by five percent to be applied to new buyers. And the developer of EcoLakes in My Phuoc District in Binh Duong province has created a breakthrough method under which customers only have to pay 30 percent of the values of the apartments in different stages, while they can borrow the other 70 percent. The most important thing is that customers do not have to pay interest on loans during the construction process or any other sums of money until the construction finishes and the apartments are delivered.

In Hanoi, Nam Cuong Company stirred up the public when launching thousands of apartments at different project sites. The successful sale of Nam Cuong’s apartments can be explained by the fact that the apartments here have middle class and mid-level prices.

Hard pressure comes from profuse supply

It is estimated that by 2010 about 3160 apartments will be marketed. Therefore, analysts believe that the sale prices may go down slightly.

About 61 projects on developing villas and semi-detached houses in Hanoi will be introduced in the market, mostly located in Lang-Hoa Lac area, and in the districts of Hoang Mai, Ha Dong, Long Bien and Tu Liem.

Meanwhile in Hanoi, 252 projects both big and small scale, are awaiting approval from the Prime Minister.

With such a high number of real estate projects, real estate developers can understand that the supply has become too high.

However, Vu Xuan Thien, Deputy Director of the House and Real Estate Market Management Department under the Ministry of Construction, said he does not think oversupply will occur.

He said most of the projects have just begun, and they will only be put into operation in 2012. Especially, the profuse supply will help make real estate prices more stable.

2010-12-02 - Viet Nam Net