Luxury apartments only 40 - 50 million VND/ m2
On the morning of June 16, when we arrived at Lexington Residence apartment building, we received information that many houses were being sold at low prices. This is a high-end apartment building located on the front of Mai Chi Tho Avenue and in An Phu - An Khanh Urban Area in Thu Duc City. However, after many years of receiving the houses, hundreds of apartments have not yet been granted pink books, so many people are frustrated and want to sell. Mr. Phan Ngoc Bao An, General Director of Nova Lexington Real Estate Joint Stock Company, investor of Lexington Residence apartment building, said that since the end of 2022, there have been many apartment transfer applications in this apartment building. Currently, 5 transfer applications are signed every day, while before, no one sold.
Many customers who bought apartments at Lexington Residence had to sell them for a price lower than the purchase price from the investor a long time ago.
Mr. Tran Khoi, a resident here, said that the apartment does not have a pink book, cannot be mortgaged to borrow money from the bank, so the price is very cheap, currently about 40 million VND/ m2 . Meanwhile, in 2016, the investor sold to customers at a price of 45 - 50 million VND/ m2 . It is worth mentioning that even though it was sold very cheaply, it was still very difficult to find buyers. Not only that, because people bought expensively and sold cheaply, many transfer documents at this apartment were returned by the Thu Duc City Tax Department because of suspicion of low declaration to evade taxes. "Finding a buyer was difficult enough. When going to the Thu Duc City Tax Department, they asked for an explanation, even returned the documents, making it very difficult, refusing to approve the tax for transfer. Most residents here buy to live. But after many years without documents, everyone is fed up and the economy is difficult, so they are forced to sell cheaply. Because apartments that have been delivered, have pink books in the same segment, same area are selling at prices from 80 - 100 million VND/ m2 ," said Mr. Khoi.
Not far away, at the Masterise Thao Dien apartment building (Thu Duc City), after many months of struggling to sell his nearly 400 m2 penthouse apartment, fully furnished, he was bought for 17 billion VND instead of the 19 billion VND he advertised. In fact, each square meter of the apartment is only over 42 million VND. A survey of the actual apartment building shows that many apartments are being offered for sale at quite cheap prices, averaging about 60 million VND/ m2 , while new projects in the same area are offering from 80 - 100 million VND/ m2 .
Recently, Ms. Phuong Di sold a 145 m2 apartment at Himlam Riveside apartment building (District 7) with fully furnished interior, for about 5.9 billion VND. Thus, each square meter is only over 40 million VND for a luxury apartment with a pink book, located right in Him Lam Tan Hung Urban Area. With this location, newly opened projects have prices from 80 - 100 million VND/ m2 . "The reason I sell the above apartment at a fairly low price is because I currently have to borrow nearly 3 billion VND from the bank. Each month, the principal and interest are paid about 48 million VND. This is a huge amount of money, becoming a burden while income is decreasing. Selling a little cheaper to pay off the bank debt is better than holding it and having to pay off the bank debt every month, which is very stressful", Ms. Di said.
Our quick survey of this apartment building shows that the quality, amenities and services here are very good, being close to Lotte Mart Shopping Center and Vietnam-Australia International School, but the apartment prices are quite cheap, fluctuating around 40 - 45 million VND/ m2 because the real estate market is frozen, many people have to "sell off" to pay off bank loans.
PRICE DOWN DUE TO LOSS CUTTING
Mr. Doan Chi Thanh, Chairman of the Board of Directors of HASG Real Estate Company, said that so far, no investor has reduced the price to cut losses, only some projects have discounted 40-45% of the selling price for customers if they pay 95% of the property value immediately. The loss cutting here only happens in the secondary market, with customers using too much financial leverage from banks, now the loan interest rate is high while the market is quiet, income is decreasing, so they have to sell at or lower than the purchase price to get rid of the goods, save themselves. "Apart from some people having to sell because they cannot bear the bank interest rate and are quiet for many reasons, the market has not changed much in price. Some investors even open for sale apartments at this time with prices higher than some products in the same segment and location or higher than the selling price of phase 1", Mr. Thanh said.
According to real estate expert Tran Khanh Quang, previously, luxury apartment projects were offered for sale at around 40-50 million VND/m2, many projects were offered for sale at up to 80 million VND, even hundreds of millions VND/m2. Most of these projects draw up high-end amenities and designs on paper, so when the houses are handed over, the quality and location do not match the selling price. Therefore, prices in the primary market will then stagnate, making it difficult to increase. "Most of the virtual luxury apartments are now being resold at 40 - 50 million VND/ m2 , while the affordable apartments of 30 - 40 million VND/ m2 ... have returned to their real prices. Currently, only those who are financially strapped are reducing prices, while most other customers are keeping the same. Investors selling new projects are also not reducing prices but are offering very good sales policies, extended payment policies... So the prices of new projects may be reduced by about 15 - 20% compared to the market price. The current market is a buyer's market. If you buy to live in or exploit for rent, you should buy an apartment that has been handed over to be able to check the quality and service. If you have a stable income, buying real estate is a good idea now," Mr. Quang analyzed.
Chairman of the Vietnam Real Estate Brokers Association Nguyen Van Dinh also said that at this time, most people with real housing needs have reduced income, while investors with money deposit money in banks for safety and profit. This makes the market purchasing power weak, but in reality, real estate prices are still very high. Only a few businesses with cash flow difficulties are willing to reduce prices by 30-40% in the form of discounts when customers pay quickly, not the whole market. Because a strong price reduction at this time can have the opposite effect because they are afraid of affecting previous customers, causing panic. Therefore, it is only possible to support interest rates, increase discounts when paying at once, and extend payment schedules. For projects that have not been launched, investors can reduce expected profits but cannot reduce prices because input costs, including "sunken costs and floating costs" are still too high.
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