Vietnam developers refuse to quit luxury home segment

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The extended slump in the Vietnamese real estate market has not deterred some developers from launching more luxury projects.

News website VnExpress quoted a source as saying the Caye Sereno Ha Long project, which was recently licensed, would sell seaside villas at more than US$1 million.

Becamex Tokyu Ltd. began work on a new urban residential development in the southern province of Binh Duong last week. Units are expected to be sold at $1.2 million.

Sales have begun at a luxury project in Hanoi where apartments are decorated with gold and can cost up to $1.7 million.

While some industry insiders welcome the continued capital flows into the high-end segment, analysts warn that the new projects will further inflate supply in a market that is already reeling.

Le Xuan Truong, director of property firm B.D.S, said it is now a huge risk to build luxury apartments. While there are affluent customers in Vietnam, they are not easily pleased or convinced to sink a lot of money in these economic times, he said.

"Many developers who have invested a lot of money in properties are now struggling to find buyers despite large discounts." 

Luxury apartment prices in Hanoi are declining, with major projects offering price cuts of around 15 percent.

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