HCMC Real estate: luxury apartment segments are highrisk

Ho Chi Minh City market is making investors high segment of the financial crisis

Three years ago, Huyen – one of the investment group from Hanoi to Ho Chi Minh City poured money to the high-end apartment projects in Masteri Thao Dien (District 2).

Like other investors, Huyen hopes to make a big profit. The market has shown signs of recovery. So far, profits have not been seen yet, but the loan interest cut off the expected profits earlier. So Huyen tried to sell as fast as possible.

She said her group was in the same situation. They are selling on all channels and also for brokers at the price lower than the original price of VND200-300 million / unit. However, the reality is that the demand for this segment is too small for them to recoup capital.

High-end apartments in HCM City are in freezing condition because of current demand

There is a wave of fleeing from the high-end apartment in Ho Chi Minh City

HCMC real estate market is on the peak of recovery, but only in the medium and low price segment. The premium segment is still locked in liquidity.

Many investors are “trying to eat sticky rice” waiting for the market in the hope of recovering capital. However, capital buried too long and plus the pressure of interest from banks, secondary investors are forced to sell off at low prices.

Nguyen Thi Thu, a developer of Star Hill project in District 7, said: “I am selling my apartment for VND4.4 billion. Including the initial loan interest for investment, I loss more than VND400 million already. In retrospect, if you invest in other mid-range or low-end projects, just surf. I can also earn VND 300 million with three investment yields. “

Similarly, Dang also owns two high-end apartments. One at Scenic Valley (District 7) and another 70 sqm on Nguyen Thi Minh Khai Street costs approximately VND3 billion a year. Mr Dang has been selling since mid-year, but so far no customers to buy.

Many investors want to sell the high-end apartments they own

Mr. Phan Anh Tu – a broker in District 2 revealed. He is being sold 10 apartments sold by the unit distributed by his unit. Although, almost sold out the number of apartments. But Tu continues to receive more apartments by customers want to sign.

According to him, recently, finding a customer who buys a house for VND35 million / sqm is extremely rare. Consumers have accepted losses, with high discount and commission rates, but demand is still not available.

The high-end apartments on which his floor is distributed are located in overloaded locations on social infrastructure. So few people decide to buy back.

Over the past two years, ignoring the warnings from the experts. There are still a lot of luxury apartments on the market

According to the assessment, the last two years is a period of recovery of the real estate market in Ho Chi Minh City. But it seems that this recovery was not for the premium segment.

A number of secondary investors have misjudged the market. So they have poured money into this segment.

Many experts said that the market over time can not create liquidity for high-end segment. Because the amount of money in the city market is not enough to quickly absorb the extremely expensive apartments.

In HCM City, in the last four years, the total supply of luxury apartments has been launched by investors to about 25,000 units.

Average price of apartments in this segment is about VND 4 billion / unit. Then the market needs to have about VND100,000 billion (more than VND4 billion) to be able to absorb all.

In the current situation, investors and secondary investors are just “holding each other” in the plan to remove the goods. Many investors are also not worried when being put in the “dilemma” situation. As most of the new projects are still in stock, a large number of apartments are still in stock.

If they offer discounted price to compete with secondary investors. They are likely to encounter opposition from loyal customers, capital to buy houses from the early stage.

In contrast, secondary investors are hard to “surf” high-end apartments when the owner has not sold out. Forcing them to drop below the initial investment price, if you want to escape the goods.

Many experts have forecasted the HCM City market in the next two years. The wave of selling to cut losses in luxury segment will be more and more. By now, there is not a clear signal for this segment.

New supply is increasing rapidly, the business channels, high-end apartments are congested, the price is not braking. It will put more pressure on secondary investors, especially those who have used the financing along the way, to borrow for investment.

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