Sales of apartments at Lexington Residence in Ho Chi Minh City has resumed at lower prices after it was taken over by Novaland in late February. Photo by Dinh Son
The stagnant property market is showing signs of livening up with major transactions taking place after many years.
Ho Chi Minh City-based property corporation Novaland announced late February it is taking over three apartment buildings, Lexington Residence in District 2 and Icon 56 and Galaxy 9 in District 4, which together have an investment of around VND3 trillion (US$142.5 million).
It has resumed sales of the apartments at prices 20-40 percent lower than nearby projects -- around VND22 million a square meter for Lexington and VND38 million for Icon 56.
Developers with deep pockets are grabbing the opportunity to control the property market by buying projects and reselling them at cheaper prices.
The city-based Thanh Nien Corporation, for instance, has bought 85 percent of a well-located project including a high-rise on Ham Nghi Street in the city center from Seaprodex Saigon, Nguyen Van Liem, general director of the former, said.
Several projects under construction by leading property group Hoang Anh Gia Lai have also changed hands.
Many foreign property companies have also entered to heat up the market since last year.
Figures from the Ministry of Investment and Planning listed foreign direct investment in the market at around $1 billion in 2013, and nearly $200 million this year.
US corporation Rose Rock has announced plans to invest around $2.5 billion in a tourism-resort complex at Vung Ro bay in the south-central region.
China’s Texhong is planning to invest around $950 million to build an industrial park in the northern coal province of Quang Ninh, where Amata corporation of Thailand also plans a $2-billion high-tech urban area.
Property exchanges have also been busy this year, with nearly 400 items sold on Novaland exchange, including nearly 100 on February 23 when it announced the takeovers.
They are also getting more inquiries.
Economist Dinh The Hien said investors’ confidence has received a boost due to lot of good news from the government like opening the market to foreign and overseas Vietnamese buyers, and further lowering of lending interest rates by banks.
Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association, said gold and stock prices, especially real estate stocks, have been going up recently, which means people are spending money.
“The property market has a chance to warm up.”
Deputy Minister of Construction Nguyen Tran Nam also said the market is beginning to recover and stabilize.
His ministry plans to boost the market by working with local authorities to suspend or cancel projects whose investors are financially incapable, and coming up with measures to avoid another bubble.
He said inventories in HCMC have fallen by 45 percent this year following a drop in prices.
Economist Le Ba Chi Nhan, a senior university lecturer in the city, said the picture is looking brighter for the market this year, but investors need to focus on low- and medium-income buyers.
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