Not many buyers

According to an official from Petrolimex Real Estate Company, the number of successful transactions has dropped dramatically by 30-40% compared to late 2007. The supply has increased as speculators are trying to sell land plots and apartments, while the demand is decreasing.

The official said that there are a lot of offers to sell the apartments, which remain on paper and will only be completed in several years.

Those who have the real demand for accommodation of course, do not want these apartments. Meanwhile speculators now also do not want to buy these apartments as they find the market cools down. A lot of people do not make deals at this moment, as they hope they will buy houses later, when the prices fall further.

Officers at real estate centres on Nguyen Chi Thanh and Thai Thinh streets and ACB Real State Trading Floor in Hanoi also said that they saw very few successful transactions over the last days. People came to listen to the situation rather than make transactions.

A client came to ACB real estate trading floor several days ago, registered to sell three apartments of a new project in Hoang Mai district in Hanoi. He said that he won the right to buy the three apartments, and he had to pay VND200mil as the security money, or 1/3 of the total money.

The project is kicked off in several days, and under the current laws, when the foundation of the building is completed, he will have to pay another 1/3 of the total sum of money. He said he cannot arrange money at this moment, especially when banks tighten real estate credit, therefore, he has to pay the right to buy the houses to take back money.

Supply-demand balance will be seen in 2010

Le Bao Chau, Deputy Chairman of the HCM City Real Estate Business Association, said that the real estate price has reduced by over 10% and will decrease further. Chau said that he knew some apartments, which had the original price of VND16mil/sq m, and then skyrocketed to VND90mil/sq m at the end of 2007, but has reduced to VND80mil/sq m. A lot of speculators are trying to sell out instead of taking on more land and apartments.

The banks’ real estate credit tightening and the stock market’s falls have been cited as the two main reasons that has caused the falls in the real estate market.

Chau said that secondary speculators and small investors will suffer from the price decreases as they are short term investors, who bought the apartments when the prices were overly high, and now they have to sell out to take back money for paying debts.

Renato Shordon, Deputy Director of CB Richard Ellis Vietnam, also said that the falls of the stock market has affected the real estate market. However, there is no reason to say that there are few successful transactions at this moment, because the transparency is not high in Vietnam’s real estate market.

Mr Shordon believes that in long term, Vietnam’s real estate market will see further growth, saying that the luxury apartment market keeps in fever. The apartments in the centre of HCM City, or beautiful positions in South Saigon area like River View, Sun Rise, Sun View, Phu Hoang Anh and Saigon Peal are still being sold at toweringly high prices. “The demand is overly high, when the supply is really short,” he said.

According to CB Richard Ellis, the supply and demand will only be in balance in 2010.
Source: Vietnamnet