Real estate on fire forced to cut price in half

Many properties on the outskirts of Saigon and in the southern provinces have reduced their selling prices by 30%, but buyers want a 50% discount before paying, causing the price gap to be large, causing transactions to stagnate.

Mr. Hoang, a real estate broker with 15 years of experience, said that the current frozen real estate market season is the time when there are fights and bargains over property prices.

He said that in mid-April, a broker offered a large plot of land near Binh Dien wholesale market. The landowner offered a price of 47 million VND per square meter, a 25% reduction compared to the beginning of last year, with a legal title deed. However, after many rounds of checking information and viewing the land, when the buyer and seller met face to face, the customer bargained down to 23 million VND per square meter, shocking the landowner and he refused to negotiate further.

According to Mr. Hoang, in this situation, the buyer's proposed price was actually just a tactic of gradually increasing the price to avoid being overcharged. However, the landowner heard that the starting price was too low and left halfway because he thought the buyer did not understand the market and did not really have good intentions.

The landowner's point of view is that the cost of the land is over 30 million VND per square meter, the social housing nearby is also over 25 million VND, and the affordable apartments around this area are around 40 million VND per square meter. Therefore, even though the landowner is short of money and needs to sell, it does not mean that he will dump the land at rock bottom.

Cases of price tug-of-war with real estate transactions for sale are not uncommon in districts on the outskirts of Ho Chi Minh City and some southern provinces. Mr. Quoc, in Binh Chanh district, is offering a 4,800 m2 plot of land, with a legal red book, for VND27 billion, a decrease of VND11 billion compared to the same period last year, equivalent to a decrease of 30%.

However, Mr. Quoc said that many customers with financial potential and cash available approached him and only offered a price of about 20 billion VND, which means a 48% discount. Because they could not negotiate the price, this transaction was not completed.

Land for sale sign on the frontage of Tan Loi - An Khuong inter-commune road, Hon Quan district, Binh Phuoc when this area had a virtual land fever in 2021. Photo: Phuoc Tuan

Meanwhile, Mr. Trung, the owner of a coffee plantation on a hill in Bao Loc, is short on cash and is selling it for 11 billion VND, a 30% reduction compared to the market price in early 2022. However, land hunters in this area are only offering a negotiation price of 7 billion VND, a reduction of nearly 60%. Mr. Trung and his customers have been bargaining for months but have not reached an agreement, the transaction is still pending.

Meanwhile, in Bien Hoa, Dong Nai , the situation of real estate being sold off due to financial difficulties and being forced to reduce prices by 40-50% is also happening. Ms. Ha, the owner of a villa in a project whose progress is being delayed and she is short of money because the investor has stopped interest support agreements, said that she offered to sell her house for 12 billion VND (contract price) with a discount of nearly 30% but the customer offered to reduce the price by 50% before continuing negotiations.

"The buyer said that the investor had offered a 50% discount for one-time payment in this project, so they only agreed to buy my villa for 6 billion VND. The buyer's price was too low, so I looked for another solution to solve the financial problem," said Ms. Ha.

General Director of Mogin Holdings Investment Consulting Company, Ms. Luong Dinh Thuy Van confirmed that in the first 4 months of the year, many institutional and individual investors with cash available began to make moves to buy back assets for sale on the secondary market. However, the buyers only targeted financially suffocated real estate that needed to cut losses, often forcing prices down by 50% or even more.

"The buyer's catchphrase is that I'm only hunting for goods and ready to cut losses, I'm not in a hurry to buy at this time," said Ms. Van. The CEO of Mogin Holdings added that with the situation of buyers and sellers being in a tug-of-war and not meeting each other to negotiate prices, liquidity in the secondary market is still quite weak.

Commenting on the above developments, Mr. Huynh Phuoc Nghia, Senior Consultant of Global Integration Business Consulting Company (GIBC), assessed that after the real estate speculation boom, there was a wave of sell-offs. But in the context of a frozen market, sell-offs are a tense tug-of-war between buyers and sellers over prices. Although sellers have lowered prices, buyers have a rather risky investment mentality at this time, and must pay low prices to avoid being overcharged. The expected selling and buying prices are currently very different, so those with money are still waiting outside the market.

Mr. Vo Hong Thang, Deputy Director of R&D DKRA Group, also said that supply and demand have not yet met. The reason is that although the price decrease is happening, asset holders have a limited threshold to bear losses.

He explained that when the selling price zone crosses the profit-taking threshold and moves completely into the stop-loss zone, if the loss exceeds the seller's tolerance threshold, it is a total loss or is not enough to cover the costs incurred during the investment process, the transaction will be deadlocked. Because the seller can accept the loss in the situation of deducting all losses and still recover a part of the asset, but if the sell-off reaches the point of total loss, they will stop selling and find another alternative.

Vu Le

Source link: https://vnexpress.net/bat-dong-san-ban-thao-bi-ep-giam-nua-gia-4603435.html