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Apartment Market Slowdown Not Due To Reduced Demand

Contrary to the land fever, the apartment segment in HCM City from the beginning of this year has been rather quiet. According to analysts, this trend is not due to declining demand but because of the limited supply of quality.

Out of stock for sale

Different from the previous year, the number of apartment projects have launched into the market from the beginning of the year that reduced sharply. According to the Real Estate Investment Review, in fact, purchasing power is still very large but focus on projects funded by prestigious investors in the market such as Novaland, Hung Thinh, Greenland, Him Lam Land, Nam Long, etc.

However, in fact, from the beginning of the year to now, the number of apartment projects have launched into the market is quite limited. There are almost no businesses offering projects for sale. Due to the limited supply, many good projects just launched to the market but are quickly sold out.

Apartment market in Vietnam
The apartment segment in HCM City from the beginning of the year has been rather quiet

Some enterprises have been recognized that offering projects to the market from the beginning of the year. Notably, there are Hung Thinh and Him Lam Land. But due to limited supply, their launching project has just been sold out, for example, Him Lam Phu An project (District 9) by Him Lam Land as the investor.

Recently, Him Lam Land introduced the third phase of 238 apartments of this project. After only 2 hours of sale, all 238 units in Block D were quickly sold. Up to now, after 3 openings, 3 blocks A, C, D are also sold out.

The current land fund to develop the projects is not much so businesses are racing to hunt for the land funds and accept the purchase at high prices. Therefore, it is possible the price of apartments on the market to be increased.

Meanwhile, for the beginning of the year, Hung Thinh has officially launched two apartment projects are Moonlight Boulevard project in Binh Tan District and Richmon City project on Nguyen Xi Street, Binh Thanh District. The supply of these two projects with nearly 1,000 apartments sold out in a short time.

>>>Read more: Apartment for sale in Ho Chi Minh City, Vietnam

Currently, Hung Thinh is no longer apartments supply for sale but transform to sell foundation soil and townhouse projects. Among of them includes a project in northern Cam Ranh Peninsula (Khanh Hoa Province) and a Villa – Townhouse project, in District 2, Ho Chi Minh City.

Similarly, D-Vela Project located in front of Huynh Tan Phat Street (District 7, HCM City) by DRH Company is also attracting visitors.

In addition to the obvious legal elements, this project has received the attention of customers because the apartments have an area from 55sqm and the total value of each apartment is only from 1.5 billion per unit. Moreover, the project also has 20 luxury standard amenities such as a luxurious lobby, 5-star hotel, indoor relaxation pool, landscaped gardens, modern gymnasium, playground area, etc.

Apartment market in Vietnam
82 of the project office-tel have been ordered by customers

Therefore, although of officially announced to the market from March this year, almost 82 office tells of the project have been ordered by customers. In addition, most of the 168 apartments in the D-Vela project have also been sold.

According to Mr.Nguyen Nam Hien, General Director of Hung Thinh Land, the reality of the apartment market has recently shown that the slowdown of the market is not due to the demand decline even the demand for buying apartments of consumers is still very large. It is because the focus is on good projects and mainly the availability of sufficient supply for this demand is still very scarce.

“If the current market is lacking or excess supply is correct. The lack of projects is invested properly and have a good position. Excess unfinished projects, investors lack prestige, weak capacity, “said Hien.

According to Mr.Hien, in the last few years, especially in 2014 and 2015, the market has witnessed many firms with financial strength are aggressively hunting for acquisitions of unfinished construction projects having a good location to buy. And then, they are restarted and launched into the market.

Therefore, to date, the land fund in the central area of HCM City is really rare. Therefore, the supply of mid-priced apartments (around VND20 million) is well-positioned, invested by reputable developers, who will definitely sell well, as compared to the real demands for housing, good project supply is currently very lacking.

Market awaiting projects, projects awaiting procedures

It can be said, in the segment of the apartment market, especially, the mid-priced apartment meets the needs of customers always so it always has a position to develop. However, after the period of market recovery over the years, the majority of completed legal projects are almost sold.

According to the General Manager of a real estate business, enterprises now have apartment projects eligible to be launched but businesses do not want to do this.

>>>See more information at: The Quality Gap Of Apartment Management

“We do not want to launch the projects now because we are researching the market, choosing the good time to launch. Moreover, the current land fund to develop the project is not much so businesses are racing to hunt for these land funds and accept buy at high prices. Therefore, it is possible the prices of apartments will be increased in the next time. “said the director.

Apartment market in Vietnam
Apartment projects with real demand still very attractive to market demand

According to Tran Khanh Quang, General Director of Viet An Hoa Real Estate Company, in the apartment market in the current period, most businesses still give priority to handling the remaining inventory and mainly explore new projects.

Mr. Quang said: “Phu My Hung Company which has many projects has still sold the sale of the old apartment and not launched any new ones since the beginning of the year.” In addition to the market exploration story, there is a reality that is happening with the apartment market now. The supply of fully legal projects is very limited. Most of the completed projects in terms of development have been almost companies have been launched in the past two years.

Mr. Quang said: “Meanwhile, to complete the investment procedure of a projection is not entirely easy. Over the past two years, the supply of projects has been launched into the market quite a bit since these projects have been built for a long time. Many of which have been built since the land fever period of 2007-2008.  However, they are blocked by the freezing market and then they are restarted from M & A deals. The new projects are waiting for the completion of legal so they are not been known when will be launched to market. “He also emphasized that the market of currently mid-priced apartments has a huge of demands but the market is waiting for the project, while the project is waiting for the procedure.

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Apartment Market Slowdown Not Due To Reduced Demand
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