Anh Tuan is selling a 78-square-meter apartment in 4S Linh Trung building in Thu Duc, HCMC, for VND28 million ($1,116.2) per sqm, down 15 percent from the start of the year. year.
He said many apartments similar to his are selling for an even lower price, between VND26 million and VND27 million per m², around the price the apartments were purchased for in 2018.
According to the owners of these apartments, prices have fallen because the building has been under construction for 8 to 10 years and the title deeds have not yet been issued.
Xuan, the owner of a 76-square-meter apartment for sale in District 7, says the price of his property has decreased by almost VND 300 million, almost to the original purchase price in 2021.
“On commercial forums, I saw many apartments in the same building priced between 38 and 42 million VND per m²,” she sighs. “If they really intend to sell at this price, it would be a huge loss for me since the building was delivered two years ago, with all the legal documents completed.”
Average apartment prices have also fallen due to oversupply.
Apartments in the Opal Boulevard building cost between VND 33 and 36 million per m². on the secondary market, down 14% compared to the previous year.
Neighboring buildings Centum Wealth and Urban Green also saw their average prices decrease by 12% and 6.8% respectively compared to the same period last year.
A new VnExpress The survey showed that price cuts gradually slowed to 10-12% towards the end of the year, compared to more drastic reductions of 20-30% earlier in the year, which also reduce the average price of apartments.
According to 2022 statistics from the real estate council Real estateaverage apartment prices had already fallen in many HCMC neighborhoods.
In Tan Phu district, the average apartment price now stands at around VND39 million, down 20% from 2022.
Likewise, prices are down 16.5% compared to 2022 in Thu Duc and 14.6% compared to 2021 in Binh Tan.
Apartments closer to the city center fare better, with average prices down only 3.2 to 6 percent from last year in some districts, like Binh Thanh and District 2, and even in increase in others, such as Binh Chanh by 5.8% and District 2.7 by 3.2%.
A Batdongsan spokesperson said prices in the primary and secondary markets were used to calculate the average figure.
The primary market has fluctuated much less from year to year, so price declines are primarily the result of changes in the secondary market.
A report by real estate agency CBRE Vietnam said apartment prices in HCMC fell 4-6% in the secondary market in the first three quarters of 2023, while they fell 4.6% in the primary market in the second quarter.
Statistics from the Ministry of Construction indicate that in the third quarter, prices on the primary market increased year-on-year but decreased by 2-3% compared to the previous quarter.
Duong Thuy Dung, COO of CBRE Vietnam, said rising loan interest rates in early 2023 had pushed real estate investors to “sell at all costs”.
Since interest is now much lower, investors are not willing to reduce prices as much, she said.
Nevertheless, apartments in the secondary market face competition from the primary market, as sellers can indirectly lower their prices through discounts and promotions which gradually increase towards the end of the year.
Besides promotions, some sellers in the primary market allow low monthly payments of 2-6 million VND and up to 2-3 years of debt extension.
At the same time, buying in the secondary market requires paying a large amount of money at once, which usually forces buyers to obtain a loan at less favorable interest rates.
According to Dung, apartment prices will not fall significantly until early 2024, but neither will they rise to the prime rates seen in 2021-2022.
“The market could start to recover in late 2024, starting with in-demand and high-liquidity sectors, such as social housing and affordable apartments. Similarly, properties in the secondary market must be affordable to attract customers,” she said.
