Secondary apartments are difficult to sell.

Many real estate agents in the eastern part of Ho Chi Minh City say that recently, although the real estate market in general has shown some positive signs, the number of apartments being offered for sale at a loss is still quite high.

The reason is that homeowners can't bear the pressure of repaying bank loans. In a large urban area in the former District 9 (now part of Thu Duc City), many people are accepting losses of 15%-25% on completed apartments, but still find it difficult to find buyers.

Selling at a loss to pay off debt.

According to Mr. Hoang, an apartment broker in this area, many apartments, after being handed over, are difficult for owners to rent out, yet they still have to pay bank interest of 13%-15% per year, forcing them to sell at a loss to ease the pressure.

For example, a luxury 3-bedroom apartment that previously cost around 5 billion VND is now being sold for just over 4 billion VND; while a 2-bedroom apartment is priced at 2.3-2.4 billion VND instead of 2.6-2.7 billion VND as before, but it's still difficult to find buyers.

"The trend of selling apartments at a loss, whether already handed over or about to be handed over, has slowed down but hasn't completely stopped because many people often face financial pressure at the end of the year. In fact, this isn't just happening in this area; many other areas are experiencing similar price reductions for handed-over apartments, while the market remains scarce in new apartment supply, especially affordable apartments," Mr. Hoang observed.

Specifically, another project in the former District 9, Centum Wealth, has an average secondary market price of 40 million VND/m2, down 12% compared to a year ago, while 4S Linh Dong apartments are being advertised at 24-27 million VND/m2.

Meanwhile, Opal Boulevard apartment complex, located on Pham Van Dong Street but within the city limits of Di An, Binh Duong province, has a secondary market selling price of 30-34 million VND/m2, a 14% decrease compared to the selling price a year ago.

An apartment project is currently under development in Ho Chi Minh City.

Even completed apartment projects, with bustling residential areas and prices typically increasing by 5%-10% annually, have seen a slowdown. Many people needing cash want to sell quickly and are willing to lower prices. For example, a two-bedroom apartment, 85-90 m2 in size, in the Saigon Pearl area, located on Nguyen Huu Canh street, Binh Thanh district, Ho Chi Minh City, is being offered for around 5 billion VND, compared to 5.3-5.4 billion VND two years ago. Similarly, apartments in The Art building (Phuoc Long B ward, Thu Duc City), handed over many years ago, are being offered for around 37 million VND/m2, 10% lower than the same period last year.

Big data from Batdongsan.com.vn shows that in November 2023, the price of luxury apartments in Ho Chi Minh City remained unchanged, but the price of mid-range and affordable apartments decreased by 1% to 4% compared to the previous month, and the decrease was even more significant compared to the previous year.

Specifically, the average price of apartments in Thu Duc City was 42 million VND/m2 in 2023, a decrease of 16.5% compared to 2022; apartments in Tan Phu District were 39 million VND/m2, a decrease of 20% compared to 49 million VND/m2 in 2022; and apartments in Binh Tan District were approximately 43.9 million VND/m2, a decrease of 14.6% compared to the selling price in 2021...

A good opportunity for buyers.

Mr. Dinh Minh Tuan, Director of Batdongsan.com.vn in the Southern region, commented that although apartment prices have decreased in some areas, they are still quite high overall. The positive point is that people's ability to buy homes is increasing thanks to preferential policies from developers.

According to the 2024 real estate consumer sentiment report recently published by Batdongsan.com.vn, 46% of respondents are satisfied with the current market situation because they now have more and better financial options.

Experts at Batdongsan.com.vn believe that the more positive sentiment among buyers and sellers of real estate will create opportunities for the market to develop in 2024 and overcome the difficulties that persisted in 2023. Mr. Dinh Minh Tuan summarized the situation of prominent real estate types last year as follows: "Apartments are flexible and adaptable, townhouses are volatile, and land plots are sluggish and waiting for the right time."

According to Mr. Tran Khanh Quang, General Director of Viet An Hoa Real Estate Investment Joint Stock Company, the real estate market at the end of the year usually follows two directions. If the market is positive, real estate prices will increase significantly. However, if the market is less positive, as it is currently, there will be a situation where homeowners sell at a loss to meet their financial needs. Nevertheless, the likelihood of this supply of discounted properties is not high, only about 5% of the market.

Those who have managed to hold out for a while longer will try to wait for the market to recover. Conversely, this is an opportunity for homebuyers or those without bank debt to use borrowed capital to buy, because the market is currently at its bottom, and it is unlikely that prices will fall much further.

According to Troy Griffiths, Deputy Managing Director of Savills Vietnam, despite the overall market difficulties, the rental apartment segment in Ho Chi Minh City still performs quite well with returns ranging from 2.9% to 13.6%. Importantly, real estate is a long-term investment channel and should be evaluated over a stable long-term period of at least 5 to 10 years.

"In the long term, Vietnam's fundamental factors such as middle-income growth, a large population, and urbanization will be the main drivers for residential real estate. Furthermore, Vietnam has one of the highest infrastructure spending rates in the region (6% of GDP), which will change how real estate is used, so investors should closely monitor these key impacts," this expert analyzed.

A reversal point is coming.

Mr. Nguyen Quoc Anh, Deputy General Director of Batdongsan.com.vn, predicted that the turning point in the real estate market could occur from the second to the fourth quarter of 2024. After that, the market will enter a new cycle with four phases: exploration, consolidation, recovery, and stabilization.

Specifically, the exploratory phase is expected to take place in the second half of 2024 with small-scale liquidity from apartment products meeting real housing needs. This will be followed by the consolidation phase, expected to fall between the fourth quarter of 2024 and the first quarter of 2025, under conditions where monetary tools and policies are broadly implemented to alleviate difficulties in funding.

Source: https://nld.com.vn/can-ho-thu-cap-kho-ban-196240110212435805.htm