Now is a perfect time for home buyers to purchase property as prices are unlikely to drop further and lending interest rates have begun to fall, realtors say.
Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association, said apartment prices have become reasonable and developers are in dire need of customers, meaning that home buyers have many options to choose from.
Chau said a number of new projects in the low to medium price range will come to the market soon at only around VND12-15 million (US$630-790) per square meter.
This is a good opportunity for buyers to negotiate with project investors for the best prices, he told Thanh Nien.
According to a director at another property firm, compared with 2007, real estate prices have declined by up to 40 percent and may have bottomed out.
Industry insiders also said high lending interest rates of up to 18 percent in recent months had discouraged many people from taking loans to buy houses. But rates have begun to go down, now standing at 14-15 percent. They could fall even further, experts said.
With interest rates no longer a barrier, people with a real need for houses should apply for loans and purchase while prices are still low, they said.
The local real estate market has been struggling for far longer than anyone expected. When the overheating market began to cool in 2008, no one predicted a market decline of over two years
Dang Hong Anh, chairman of Sacombank's real estate company, said the local market has seen both prices and transactions fall since early 2008.
According to a report by UK real estate service provider Savills, only around 1,800 of 9,000 apartments available in HCMC were sold in the first three months this year, down 48 percent from the final quarter of 2009. The market is still gloomy, the company said.
Matthew Koziora, director of sales and marketing at VinaCapital Real Estate, told Saigon Tiep Thi newspaper the luxury apartment segment with prices of more than $2,000 per square meter had been almost completely ignored by home buyers while only a few transactions were recorded for $1,500 per square meter apartments.
Home buyers with a real demand for houses believe that developers have set prices high to gain huge profits, said Vu Quoc Thai, director at local research firm VietRees. As a result, they will not purchase homes until they see prices being cut, he said.
Another realtor who wished to be unnamed said home buyers have also become pickier. "They used to pay attention to prices only, but now they also study carefully the competence of developers, contractors and project managers as well as materials and designs."
Many developers told Thanh Nien they have noticed that unhealthy marketing ploys can no longer be used to "blind" customers. Home buyers now want to know exactly what their future home looks like, when they will receive it and whether their down payments are safe.