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HCMC: Super – Luxury Real Estate Is Still Expensive

Super luxury real estate

In spite of the price up to 430,864 million USD, luxury apartments will be very picky and difficult to consume, the market reality is showing the opposite.

6-star apartment attracts guests

According to the report of the Vietnam Real Estate Association, in 2015, HCMC had nearly 26,000 new apartments which include up to 40%  of luxury apartments coming onto the market by the inventors. In 2016, there were 24,000 new apartments put up for sale; of which, the number of luxury apartments accounted for 31%.

In particular, the market received two super-high-end projects, with apartment prices of 430,864 per unit or more. It is the Madison project with two fronts of Thi Sach and Cao Ba Quat Streets, District 1, Ho Chi Minh City, owned by Novaland. The apartments are designed and built in the 6-star style of European Renaissance architecture. The second one is the Vinhomes Golden River project in Tan Cang which was built also in District 1 by the Vingroup Group as the investor, the ultra high-end blook with the price of 430,864 per apartment.

A demand for luxury apartments of wealthy families is rising at the right level, but the land fund for super-luxury projects is too small.

Also in District 1, CBRE Vietnam has four luxury apartment projects in 2016, priced at the US $ 5,500-9,000 / sqm (equivalent to VND 120 – 200 million / m2).

Super luxury real estate
In Vinhomes Golden River there are many foreign apartment owners

It was considered a record high price over the last 10 years, however, the data were released by the unit showed that despite high prices, it seemed to be competitive compared to the Major cities in the area. Because the price of luxury houses in HCM City is $ 3,500 – $ 7,000 per square meter, much lower than that of in Singapore ($ 20,000 – $ 25,000 /sqm) and Bangkok ($ 7,000 – $ 10,000/sqm).

Although the price is very high, many investors said, the project only opened for sale in a short time there were buyers. Part of the reason investors are offering is that the urban landholding is becoming increasingly limited, with gold projects counting only at the fingertips. Another point is not every investor can develop super-real estate projects, because besides strong financial strength, the need for prestige and professionalism. In addition, these products were limited in number, and were offered for sale on a limited basis.

That’s the reason why a thousand luxury apartments of the Vinhomes Golden River Project had owners just only a short time. From the end of 2016, when the project was handed over to customers, these luxury apartments started to light up every night.

The market is still thirsty

In 2016, only two hypermarket projects were launched, in 2017, information that only HimLam Land Real Estate Company is preparing to market a super-luxury project in Thi Sach street (district 1), the project is 21 stories high with the number of just over 100 apartments. In addition, the market does not have any information to show that there are more super high-end projects appearing in 2017.

According to Savills Vietnam, developers always tend to create super high-end properties with criteria such as isolation, full facilities, luxury, class, located in the desire, etc. to meet the expectations of the most discerning customer.

Super luxury real estate
About a thousand luxury apartments of the Vinhomes Golden River project in a short time have owned

Another highlight of this project has already announced the annual Global Wealth Report 2017 report by Knight Frank in early March show that the rate of super-rich people is increasing.

The report points out that Vietnam is the country with the highest population growth rate in 10 more years. The number of super-rich people in Vietnam is forecasted to increase by 170% from now to 2026, reaching 540 people. According to the report, last year, Vietnam had 200 super-rich people, there was an increase of 30 over 2015.

From here, the demand for luxury apartments of the wealthy rich increasing in their right level also increased, while the land fund for the super-luxury project too few.

Ms.Pham Thu Thuy, a wealthy woman with millions of dollars in assets, said demand for luxury flats was essential to the rich, because living in these projects they felt valued.

According to Thuy, although the price of the super luxury apartment is about 430,864 million USD, the investor always offers discount promotions, so when the payment, the price will drop to about 350 million USD. With that money, a lot of people can own super luxury apartments, not necessarily the super-rich.

Owners of apartments in super-luxury projects in Ho Chi Minh City are not only domestic customers, but also foreign investment group guests such as Japan, Singapore, Australia and so on.In particular, at the project Vinhomes Golden River, there are many apartment owners are foreigners.

Ngo Quang Phuc, deputy general director of Himlam Land Real Estate Company, said that demand for housing is now diverse, especially in 2017, the HCMC market will be more active.

Super luxury real estate
Green living spaces are popular despite the high prices

“The investors in Ho Chi Minh City have the land located in prime location tend to develop the super-luxury project. Because the cost of land here is very high, construction costs are high at the completion stage so the owner must sell the high price and quality must also be high. In addition, demand in this segment is very much, low risk and can be controlled, “Phuc said.

At the same view, Le Hoang Chau, President of HCMC Real Estate Association said that there would be some new ultra-modern projects coming to the market in the coming time to solve the thirst of stool apartments.

According to Chau, rare land fund, but not without, because in recent years, Ho Chi Minh City has held the auction gold fund “in the heart of success. This will be a good land fund for investors to develop super real estate project.

In addition, with the presence of super-real estate projects developed during the difficult time of the market and now have to stop construction, in the coming time, these projects will be restarted, the supply from these projects will also be quite high enough to meet the market demand for apartments.

According to Chau, this segment will be less secondary investors, mostly buyers in real demand. While the amount is limited, plus the developer must have the real potential to develop this type of project so the super-premium real estate segment will be more sustainable than other segments and have a vibrant implicit.

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HCMC: Super – Luxury Real Estate Is Still Expensive
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