| Home prices dip alongside interest cuts, cheap materials |
| Sunday, 31 May 2009 | |
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Interest rate cuts and cheaper construction material costs have pushed down housing prices in HCM City, said a senior executive at a property company.
Some developers have reduced apartment prices by 40-50% from last year as construction material prices have fallen to a three-year low, said Luong Tri Thin, general director of property firm Dat Xanh. He also said builders could now borrow easier from banks, enabling them to complete projects at lower initial costs. Efforts to stimulate the economy have seen the central bank slash the key rate from 8.5% to 7%, allowing commercial banks to charge interest on dong loans up to 50% above the benchmark rate, which is now only 10.5% a year. Dat Xanh plans to offer 224 apartments in the SunView Apartment building in HCM City's Thu Duc District at the price of US$764 per square metre, a drop of more than US$500 a square metre from last year. According to the HCM City-based firm, 60% of its customers wanted to pay no more than 1 billion dong (US$57,200) for a full apartment while only 10% were in the market for apartments at US$1,500 per square metre or more. Property firm Vinh Tuong has begun selling apartments in Block 3 of the Tan Tao Building in Binh Tan District at some 9 million dong (US$515) per square metre. Each 70-120 square metre apartment has two bedrooms. Apartments in Nam Long Company's Ehome Building in District 9, which is under construction and scheduled to open by September, are on sale for 11.5-14.5 million dong (US$671-847) per square metre. Apartments larger than 50 square metres at the 17-storey Sunshine Building under construction in Thu Duc District are expected to be sold for only 500 -600 million dong (US$29,197-35,036). HAGL Land cut prices for its new Hoang Anh River View apartments in District 2 by 40% to US$1,350 per square metre last week. It has also lowered prices at another project in Nha Be District to US$1,250 from US$1,800 per square metre. Le Hung, director of HAGL Land, said the price cuts would "revolutionise" the HCM City property market in line with government efforts to stimulate the economy. In Hanoi, medium and low-income apartments are selling for a whopping 25 million dong per square metre, said Le Xuan Truong at property firm B.D.S Co. Thin told Thanh Nien that property firms didn't expect profits this year to look anything like they did in 2007, when prices and sales went through the roof. But 2009 is set to beat dreary 2008. "Their earning growth target is 20-30% this year," said Thin. In another boon to the local property market, several banks have recently begun offering loans for house and apartment purchases. Western Bank is lending a maximum of 1 billion dong to potential homebuyers at interest rates of between 10.5-13.2% a year for the first three months. Tien Phong Bank is offering 15-year mortgages worth 70% of the house value at 10% interest. Vietnam Export-Import Commercial Joint Stock Bank, or Eximbank, Asia Commercial Bank and Sacombank are also offering housing loans. |
