Some apartments on prime land are discounted by nearly 40%

Ho Chi Minh City Some luxury apartments on Co Giang Street, a prime location in District 1, previously priced at VND18-19 billion per unit, are now being sold for VND11 billion on the secondary market.

Mr. Chau, a broker with over ten years of experience in the real estate industry, has just offered a number of luxury apartments at shockingly reduced prices right in the city center. According to this broker, the products of the Manhattan project, located on Co Bac - Co Giang Street, District 1, are assets that customers have mortgaged to a unit, and now they need to sell them at a lower price than the investor to recover capital.

Specifically, customers who previously bought these apartments at the original price of about 18-19 billion VND per unit are now selling them at a discount of about 11 billion VND, a 39% reduction compared to the listed price on the contract. "Currently, the inventory includes 2-3 bedroom apartments with different prices. This is a case of selling at a loss to solve cash flow," said Mr. Chau.

According to VnExpress 's research, the luxury project that is seeing some discounted apartments has the full name The Grand Manhattan, located at 100 Co Giang Street, in a prime location right in the center, adjacent to a series of iconic landmarks such as Nguyen Hue Walking Street, Bui Vien Western Street, Ben Thanh Market or the City Theater. However, this is only a local price reduction phenomenon, not common and does not represent the entire luxury housing market in District 1.

The project has a structure of 3 towers 39 floors high, scale of more than 1,400 apartments, 4,200 m2 of internal park, 5 floors of international standard hotel, 2 commercial floors, uniquely designed, separate apartments, expected to be managed and operated by Savills Premium and Minor Hotels.

The Grand Manhattan, formerly known as Co Giang Apartment, Co Giang Ward, District 1, was granted investment approval by the Ho Chi Minh City People's Committee in 2017 and 2018. The investor is Dat Viet Development Joint Stock Company, Novaland is the developer. By the end of February, the project had reached the 28th floor and was among the 7 typical projects that the city has accelerated to resolve legal difficulties related to financial obligations regarding land use rights.

In the middle of last year, Novaland widely announced on the market that it would apply many incentives for customers buying the Manhattan project, such as a payment schedule of only 10%, up to 20% until receiving the house, interior package incentives of up to 399 million VND (with conditions), Novaloyalty incentives of up to 5%, and incentives for free management services for 5 years.

Current status of The Grand Manhattan project on Co Giang Street, District 1 at the end of February 2023. Photo: Chau Long — Current status of The Grand Manhattan project on Co Giang Street, District 1 at the end of February 2023. Photo: *Chau Long*

Speaking to VnExpress on the morning of May 12, a representative of Novaland said that this project currently does not have enough products to sell, and the primary price has not decreased. Up to now, there are very few products left in the basket, and many bondholders of the company want to exchange products but do not have enough products to exchange.

Novaland representatives also said that there are few customers who sell real estate in the central area at a loss. The reduced price that brokers are offering may be compared to the current price (not the original price). On the other hand, the current general situation of new projects not being approved for market launch, the supply of luxury houses in the central area of Ho Chi Minh City is very limited, so there is no situation of primary price reduction.

Mr. Tran Khanh Quang, General Director of Viet An Hoa Company, acknowledged that currently, real estate investors selling at a loss of 30-50% has become common in the suburbs and remote provinces, but in the central area of District 1, a 35-40% discount is a shocking reduction. Because real estate on prime land, located in the heart of the city center, is often a property that holds its value well and is scarce, there are not many cases of price reduction with a large margin of over 30%.

Mr. Quang said that in the harsh context of frozen real estate, maybe because of financial suffocation, loss of control of cash flow, luxury apartment buyers have chosen to cut losses or may have their debts assigned or seized. The 40% discount on luxury apartments shows that even high-class customers are in difficult circumstances.

"This could be a turning point for the market in the context of personal loans using real estate as collateral being tightened by banks, money being withdrawn, and at the same time, loans to buy real estate are becoming very difficult," Mr. Quang commented.

Data from Cushman & Wakefield, a multinational research firm, showed that the luxury housing market in District 1 had no new supply last quarter. The total cumulative supply of completed and under-sale units (cumulative old supply) was limited to more than 1,900 units, with primary prices down 1% year-on-year.

However, this unit said that if compared by quarter, the primary selling price in the first quarter of this year is increasing by 10% compared to the fourth quarter of 2022 due to an individual investor of a luxury project on Nguyen Trai Street, District 1, increasing the selling price of old goods (inventory). According to this unit, luxury apartments in Ho Chi Minh City have a primary selling price of 4,500-10,000 USD per square meter.

CBRE Vietnam also said that apartment segments in Ho Chi Minh City are divided into 5 levels. Super luxury is a project with an average primary price of over 12,000 USD per square meter. Luxury is a project with an average primary price of 4,000-12,000 USD per square meter. High-end apartments have an average selling price of 2,000-4,000 USD per square meter, mid-range has a price of over 1,000 USD to 2,000 USD per square meter. Affordable apartments are projects with an average primary selling price of 1,000 USD per square meter or less.

Vu Le

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