The prices of all housing segments in Ho Chi Minh City dropped last quarter, but property services firm CBRE said they have to drop further if existing inventories are to be cleared in the next two or three years.
Among the segments, high-end apartments saw the largest decreases, falling 2.3 percent during the quarter and 7.6 percent year-on-year, the firm said in a quarterly report released January 3.
Developers are making a "positive" move by reducing the prices of over 28,000 unsold units, Marc Townsend, CEO of CBRE, said.
But they can only sell them if they continue to cut prices and banks further slash mortgage rates, he said.
The report said there is a huge demand for mid-priced homes costing VND10-14 million (US$480-670) per square meter, especially in districts like Binh Tan, Nha Be, and Thu Duc.
More than 75 percent of Ehome 3's 333 apartments in Binh Tan District have been sold within five months of hitting the market.
Tanibuilding Son Ky 2 in Tan Phu District has sold 75 percent of its units since first offering them last quarter. They were priced at VND0.6-1 billion ($28,800-48,000) each.
Of the 900 apartments launched for sale in the fourth quarter, mid-priced ones accounted for nearly 60 percent.
"˜Good signs' for the retail market
The launch of two shopping malls, Vincom Center A and Pandora City, in the last quarter was a "bright spot" in the beleaguered property market, with occupancy rates remaining unchanged quarter-on-quarter despite the increased supply.
But it has dropped 8 percentage from the same period in 2011.
Vincom Center A, which opened in October in District 1, has 95 percent occupancy, while Pandora City, which opened a month later in Tan Phu District, has leased out 80 percent of its space.
An additional 80,000 square meters of retail space came into the market last quarter.
Taking advantage of its prime location, Vincom Center A is offering space on the ground and first floors at $135 per square meter, the highest ever rate in the city and 10 percent higher than the average downtown rate.
Last quarter the average rent rose by 2.6 percent in the downtown area and 0.8 percent in other areas.
Duong Thuy Dung, a senior manager at CBRE, said the figures for the retail segment are a "good sign," but admitted other segments are struggling to attract buyers and lessees.
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