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Low-priced apartments selling better than higher-priced ones   2009-07-23 - VNE

In the first three weeks of July, the land price escalation in HCM City stopped, while the high-grade apartment market was quiet. However, the lowered-priced apartment market segment was bustling with 11-15 million dong per square metre apartments being hunted.


According to Vinaland real estate trading floor, Tan Mai apartment project in Binh Tan district is the one which saw the highest number of transactions in the period thanks to soft prices. Having the sale price of 12.8-13 million dong per square metre, the apartments have been attracting clients from Long An, Tien Giang and Tay Ninh provinces. On average, a 47-67 square metre apartment costs some $600 million dong.


Also on Vinaland trading floor, apartments of Ehome East Saigon in district 9 are also attracting buyers. Though most buyers buy the apartments for accommodations, some owners are still offering to resell them at 14 million dong per square metre, which means the total value of between 500 million and 1.5 billion dong for every apartment.


In advertisements, Hoang Anh 2 apartments are now offered at 15-17 million dong per square metre, apartments at the Mansion in Binh Chanh district at 13-14 million dong, ones in Carina in district 8 for 12-13 million dong.


Many other real estate trading floors in HCM City have also reported increasing high percentages of successful transactions of small apartments priced at 11-15 million dong per square metre. The common characteristics of the apartments are that they have low prices, good infrastructure conditions and they can be occupied in a year or year and a half. Apartments which are expected to be delivered this year are tending to see prices increase by 5-10 percent.


While low-priced apartments are selling well and attracting people, high-grade apartments which target high-income earners cannot lure buyers.


The high-grade apartment projects in district 2, which is called the eastern area of HCM City, have been selling very slowly, though they were launched a long time ago. The Vista, Estela, Blooming Park and Xi Riverview Palace still cannot lure people like during the land fever period. However, high-grade apartments in district 7, or the southern area of HCM City, still can attract customers. Phu My Hung apartments, for example, though they have very high prices, at 35 million dong per square metre and higher, are still selling well.


It has been asked why high-grade apartment projects in district 2, where there are the Thu Thiem new urban area, East-West Avenue project and a series of infrastructure items has been upgraded, still have fewer customers than projects in district 7.


According to Head of Vinaland Tran Nao real estate office Nguyen Xuan Loc, it is because lowered-priced apartments are selling better and because of the oversupply of high-grade apartments.


Explaining this, Loc said that the high-grade apartments in the southern area of the city are selling better because there is the Phu My Hung urban area, and Phu My Hung high-quality products are well known. Meanwhile, district 2 does not have a ‘nucleus’ like Phu My Hung.


Loc added that low-cost apartments have become the focus of the market, while the sale of high-grade apartments has become gloomy despite a lot of promotions.


“It is now not the right time to launch high-grade products, since this market has become saturated and investors lack confidence. Small apartments with low prices for accommodations prove to have more potential this year,” he said.


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