Ho Chi Minh City luxury apartment market continues to languish

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People who bought luxury apartments in Ho Chi Minh City are finding out that selling them is a hard task since demand has plunged because of the economic meltdown while supply is high.

Buyers, fearful of further price falls, are simply not interested though the lack of demand has already dragged prices down sharply.

Le Thanh Phong, director general of city-based real estate firm Lac Viet Land, estimates that only a tiny fraction of buyers choose penthouses and other luxury apartments.

News website VnExpress quoted Tran Minh, a city resident, as saying he has been trying in vain to sell a penthouse in District 7 and a riverside villa in District 2.

"I'm willing to offer discounts but buyers still think the houses are too expensive." he said.

Others even accepted to take losses, but to no avail.

Bich, who owns a 300-square-meter apartment in Binh Chanh District, said she has been unable to get VND5 billion (US$240,000) for it. She bought it five years ago for VND5.4 billion and spent another VND2.5 billion on its interiors.

The primary market is quiet, the manager of a property trading floor in District 1 said. Most traders on the secondary market want to sell rather than buy property, and prices of apartments costing VND5-7 billion are sinking, he said.

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Nguyen Van Duc, deputy director of property company Dat Lanh, suggested that people should seek permission to divide their penthouses into smaller apartments since luxury properties cannot compete with small and low-cost houses for which there is demand.

CBRE, a US-owned real estate consultancy, said luxury apartment prices in the HCMC secondary market fell by 9.4 percent year-on-year in the first quarter of 2012.

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