HA NOI (VNS) — The luxury apartment market in Ha Noi is faced with a high inventory, though investors have reduced selling prices and offered a range of promotion programmes.
Despite price reduction, the total value of a luxury apartment is still high, thus taking it out of the range of a majority of home buyers.
Some projects at the completion stage, such as Huyndai Hill State in Ha Dong District, have a high inventory despite preferential interest rates.
Home buyers interested in the project, which has an acceptable price of VND23 million per sq.m including value-added tax and 2 per cent of maintenance fee, were not able to pay for such an apartment with an area of 102 to 168 sq.m.
The investor had decided to lend home buyers 70 per cent of the apartment's value on zero interest in the first year. Buyers, therefore, would have to pay 30 per cent of the total to own their house.
A representative of the property exchange floor in Ha Noi told online newspaper Vietnamnet that the successful transactions of luxury apartments in the city were just 30 per cent.
He said most of the customers wanted to buy apartments which were small and medium size in area. They were averse to buying apartments with a total value of more than VND3 billion each and with an area of over 100sq.m.
Tran Nhu Trung, Deputy General Director of Tan Hoang Minh Group, told the newspaper that several investors had a high inventory of luxury apartments as it did not suit the home buyers' real demand as well as economic conditions.
Trung said property investors should restructure their products to match people's demand, but were unwilling to lower the prices of luxury apartment because it was a matter of prestige.
Several companies have even rent out the apartments to resolve the difficulties for short term periods.
Experts forecast a preference for small apartments with favourable conditions. The difficult situation for the high-end segment was expected to continue. — VNS