Developers of several high-end housing projects in Ho Chi Minh City are making large price cuts to spur demand as the prolonged property slump continues.
Nova Real Estate Investment Corp (Novaland) said September 9 that it was cutting the prices of apartments at the unfinished North Towers at its Sunrise City in District 7 to VND27 million (US$1,278) per square meter.
This compares with VND39-50 million for units at the existing South Towers which hit the market in mid-2012.
Speaking about the price cuts, Novaland director Phan Thanh Huy said liquidity is one of the company's biggest concerns now.
Three days earlier developer Phat Dat Corp reduced prices at its EverRich 3 project in the same district. Land plots for 75 villas and detached houses now cost VND40 million ($1,890) per square meter on average, down from VND80-100 million earlier.
Phat Dat general director Nguyen Van Dat hopes the company can sell all remaining units this year.
According to a report on the last quarter by property services company Savills, average housing prices in HCMC are down 21 percent since early 2009.
The high-end segment suffers from excessive supply while there is great demand for housing among low-income earners.
Official data shows that in HCMC the number of unsold apartments has crossed 12,610.
Analysts have said developers are doing the right thing by cutting prices, adding the government's measures to revive the real-estate market need time to take effect.
Loans worth VND700 billion have been given to two firms and 56 individuals as of the end of July under a $1.43-billion government lending program for low-cost housing launched two months ago.
Economist Tran Du Lich said he supported the government's backing for the affordable housing sector in which units cost less than VND1 billion ($47,190) in HCMC and Hanoi and VND500-600 million elsewhere.
The high-end segment should not be aided since the market has to resolve itself with developers lowering prices, which is "the best solution" to improve liquidity, he added.
Le Hoang Chau, chairman of the HCMC Real Estate Association, said developers may want to target the 80,000 foreigners who live and work in Vietnam.
The government is considering loosening regulations on home ownership for foreigners as part of its efforts to revive the property market.
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