From the beginning of the year until now, in Ho Chi Minh City and the southern provinces are flooded with information about real estate for sale to withdraw capital and cut losses. The reason for this situation is that lending interest rates increase, while most investors use financial leverage, the market freezes, causing business losses.
Accept selling at a loss
As noted by the reporter, currently a lot of information for urgent sale of real estate at low prices such as "sold money to sell at a loss", "sell at a loss for real estate", "stop loss need to sell urgently", "bank debt needs to be sold urgently" ... appear constantly on real estate sites, social networking sites, real estate brokerage groups. According to real estate experts, from the middle to the end of 2022, the real estate market in Ho Chi Minh City faces many difficulties when liquidity slows down, banks increase loan interest rates, many real estate investors fall into a "crisis" and have to find sources of money to rotate capital, repay loans and interest, etc. Some investors are forced to reduce real estate prices to sell goods early to cut losses.
Ms. Ho Minh Giang, who lives in Binh Duong, said: “I bought the Bescon project in Binh Duong from 2021. At first, I still paid money on schedule, but from the beginning of 2023, the economy was difficult, I was worried that I would not have enough money to continue paying. Recently, the investor called to sign a purchase and sale contract, but I am asking to stop closing and selling at a loss a 1-bedroom apartment of 50 m2. The initial price I bought more than 1,57 billion, now only sell 1,50 billion to cut losses, but can't stand it."
Also falling into the above case, Mr. Do Van Hung, who lives in Go Vap district, said that he and his relatives invest in real estate in the district. Initially, everyone contributed capital and did not borrow from the bank, buying a house of more than 5 billion in Thong Nhat alley. However, since the beginning of the year until now, the economy has been difficult, everyone has financial problems, so they have to sell, accept a loss of nearly 500 million to sell the house above.
Nguyen Thi Van, a broker at Huynh Gia Real Estate Company, Thu Duc City, said that a villa project of nearly 100 m2 wide, 3-storey high in the high-class line in the suburbs of Ho Chi Minh City has just been offered for sale with a cut loss and discount of 2 billion dong, but for nearly 3 months now, there has been no buyer. It is known that the original price of the previous villas was nearly 15 billion VND.
Fortunately, Mr. Vo Minh Hung (living in District 3, Ho Chi Minh City) has just sold an adjacent apartment in Thu Duc City to reduce bank interest. He said that the original price of the apartment he bought was 7 billion VND, but he borrowed 2 billion VND from the bank, with an interest rate of 10%/year. From the beginning of the year until now, bank staff announced the interest rate increase to 14%/year. According to Mr. Minh Hung's calculations, with 2 billion VND of bank loans, the interest rate for 2023 will be above 300 million VND, or maybe even higher. In the situation of fewer and fewer homebuyers, inventory will increase in 2023, so the longer you keep it, the more it costs. Therefore, Mr. Hung decided to sell the adjoining apartment urgently at the exact cost of the investor's purchase, in addition, he also reduced an additional 300 million dong of taxes and fees... for the new owner.
There are sellers, there are no buyers
According to real estate experts, stemming from the pressure on liquidity is weighing down, many investors find ways to stimulate demand, such as discounting over 20-30% of the selling price, even with projects up to more than 40%. It can be seen that a number of developing projects in the East area such as Moonlight Avenue, MT Eastmark City or adjacent projects such as Bcons City, New Galaxy Di An ... are being offered for sale and at a "huge" discount. Specifically, at the Moonlight Avenue project (Thu Duc City), previously, the brokerage house for sale apartments ranging from 1,3 billion (34 m2) to 2,5 billion (69 m2), now offered for sale at a discount of 15-20%. In particular, the discount policy is up to more than 50% for customers who pay over 95% of the apartment value. In case homebuyers choose to borrow from a bank to pay, the discount rate will be 11,5% and interest-free for 18 months. However, although this project is for sale with many attractive incentives, it has not been able to fill up until now because of the lack of buyers.
According to Nguyen Hai Phong, a real estate broker in Thu Duc City, currently, all floors are trying to sell and adjust prices in line with the market. This discount makes the business more convenient even though the profit is low, but selling is still the first thing to realize the goal of "selling at a loss, cutting loss" to recover cash flow.
Nguyen My An, General Director of New Star Real Estate Company (Thu Duc City), said that the reason why some real estate projects have applied a discount program of 30-40% for apartment products is due to a large inventory. In addition, not to mention the real estate market has been pushed too high prices recently. Up to now, the market has entered a stage of stagnation, with poor liquidity, so investors have to discount products to have cash flow.
According to Ms. Nguyen My An, at this time, those who are looking to buy a house and pay a deposit are those who have real needs and have real money, not borrowing, helping investors who are having difficulty in cash flow to take advantage of capital from customers. However, only a few are willing to spend money to "bottom-fish" real estate and those who really need the money to sell the property they own. But the market today also exists a paradox: "There are sellers, there are no buyers".
Le Hoang Chau, Chairman of Ho Chi Minh City Real Estate Association, analyzed that in 2023, it will continue to be difficult because lending interest rates have not been reduced. However, real estate and real estate for rent, especially those that have been formed, will not decrease much because the supply is very scarce, while the demand is still high.
“Statistics not only of the association and of many other units are also showing that, despite low liquidity, real estate prices are leveling off or decreasing a little, not falling deeply. The sale offers to cut losses, deep discounts are just a way to stimulate the curiosity of customers in the current situation of the quiet real estate market. Therefore, whether investors should wait to catch the bottom or not depends on their financial situation. In fact, the current decrease in real estate prices is still mainly a reduction in project profits, not a reduction in capital of real estate projects. If people have a good amount of cash, don't have to borrow or borrow a lot, this is an opportunity to compare and choose real estate products, wait for the market to warm up, then push the goods to sell," said Mr. Hoang Chau.
Lesson 3: Real estate workers are constantly being cut
