Vietnam News Network

The real estate market, which has just become a little warmer, has become cold again, as the stock market has become more bustling, attracting investors.

Since the excitement in March 2009, the HCM City real estate market has fallen into quietness again.

Buyers turning backs on higher-end apartments

According to Nguyen Van Hai, General Director of the trading floor, only low-cost apartments are selling well. He said that within just one week, all the apartments offered for sale in the first phase were sold at VND8.8-10mil/sq m.

Meanwhile, high-grade apartments, which people scrambled to purchase after Tet, have been selling very slowly with only several apartments sold a month.

Hai said that clients now tend to turn their backs on projects on medium- and high-class apartments. Explaining this, he said that disputes occurred between investors and buyers. A lot of projects have not been completed on schedule, while investors did not respect the commitments.

Unlike the medium- and high-grade apartment market, the house market in the inner city proves to be very bustling. In March, ACB trading floor successfully bridged 44 transactions, while 23 successful deals were reported for the first half of April. These do not include 100 cases in which buyers and sellers made transactions not on ACB’s floor, but with the assistance of the floor in administrative formalities.

Hai went on to say that most successful transactions now belong to assets worth VND1.3-3bil, which makes him believe that most buyers now really have a demand for accommodations and are not just making purchases for investments.

Project land quiet again

In the market excitement in March 2009, the project land in localities near Thu Thiem and Nam Saigon new urban areas increased by 20-30%. However, over the last one month, since the stock market warmed up, the project land market has returned to quietness.

A series of projects, which saw prices increase sharply in March, like Him Lam – Kenh Te, Trung Son, have seen prices down by VND5mil/sq m to VND32-35mil/sq m. In projects like university village and Tan An Huy, land prices have returned to the price levels before the excitement period, at VND12-16mil/sq m.

Truong Hoang Phuc, the owner of Hoang Phuc real estate brokerage office on Le Van Luong street in Nha Be district, said: “There were few sellers last month. Now there are more sellers, while the transaction conditions are more flexible, but there are very few buyers.”

Experts say that the project land market is now under heavy pressure. The stock market has become hot, and investors are now paying attention to the stock market as it can bring fat profit, rather than the real estate market.

Hai from ACB trading floor has explained the low attractiveness of project land in another way. He said that the project land has climbed to the highest peaks as the land has gone through many hands. Those who purchase project land need to have VND2.5bil at least to purchase land and build a house. With this sum of money, people would rather purchase a house in the inner city.

Regarding purchasing for speculation, Hai said that it is now not the right time to invest in land.