Lure towards provincial projects
Since the beginning of the year, there have been very few events promoting new projects in the real estate market in Ho Chi Minh City. At the end of May, the Phu My Hung Group organized an experience and information sharing event about The Antonia project, the latest project launched by the investor. Recently, the Dai Phuc Group introduced the Sunlake Shop Villas project, a subdivision project of the Van Phuc urban area in Thu Duc district that includes 108 shop villas. These are two of the very few new real estate products that were launched in the City. However, these are only part projects of larger projects that the investors have already completed.
Many remaining events include the introduction of new projects to be invested in several provinces. The PPC An Thinh Group, investor of Wyndham Soleil Danang project, has just signed a contract with seven strategic agents to distribute this project in the North and the Central Regions. The Le Phong Investment and Development Company Ltd. has just signed a cooperation agreement to develop a 40-storey Emerald Golf View apartment project, the biggest project in Binh Duong Province today, with total investment of VND 2,000 bn.
Novaland Group is also introducing the Aqua City Ecological Urban Area project in Long Hung Commune in Bien Hoa City in Dong Nai Province. The project covers an area of about 100 hectares, has natural ecological elements, is surrounded by a green river system, and is eligible for standard ecological urban planning. Other hit projects around Ho Chi Minh City are by the Phat Dat Real Estate Development Joint Stock Company, which has just introduced two projects, namely, the Astral City Binh Duong apartment along Highway 13 in Di An City over 3.7ha area with eight apartment blocks, 5,200 apartments, at a total investment of VND 5,800 bn, and the Ky Co Gateway land in Quy Nhon in Binh Dinh Province at a total investment cost of around VND 10,683 bn.
Mr. Duong Minh Tien, General Director of Asian Newtimes, based in Ho Chi Minh City, and the co-developer of the Ky Co Gateway project, said that in the current context, it is necessary for businesses in Ho Chi Minh City to look for investment opportunities in other localities due to the fact that the land fund in Ho Chi Minh City is almost no longer available, and the procedures for implementing projects have recently become very difficult. Many other localities offer greater opportunities in the field of real estate, have potential for further development and can easily attract investors, especially customers from Ho Chi Minh City with great financial backing.
Unpredictable spending
Ms. Nguyen Thi Thanh Huong, General Director of Dai Phuc Land, said that at the Van Phuc City project, purchasing power at present is still very weak, probably because customers are still psychologically affected by the ongoing pandemic. According to experts, customers buying to invest for posterity have dropped sharply in recent times, but affordable apartment projects have support from banks, or some projects in suburban areas or provinces adjacent to Ho Chi Minh City are more likely to gain attention of investors.
Mr. Pham Lam, CEO of DKRA Vietnam, said that after Vietnam was able to successfully control the spread of the Covid-19 pandemic, social life is at a "new normal". In the second quarter the market recorded positive signs of recovery, when supply and new sales increased significantly compared to the previous quarter. The price has not changed much, although liquidity in the market is still quite low compared to the end of 2019.
In Ho Chi Minh City, in the land plot segment in the second quarter, DKRA Vietnam launched three projects in the market, providing about 193 plots, an increase by 10% compared to the new supply in the first quarter, and equal to 66% in the same period in 2019. However, the new supply rate reached 53%, equal to 73% compared to the first quarter and 39% over the same period last year. Meanwhile, the apartment market in the second quarter saw sales reach about 72.8% with 1,765 units, up 54% compared to the first quarter but down about 13.8% over the same period last year. In some other segments, demand also decreased.
According to one news reporter, projects must meet the needs of the buyer in terms of price, commuting convenience and liquidity. For most projects the customers are mainly investors. One group of customer was aiming at marketing "surfing", but it is now difficult to sell, therefore many customers have chosen to pay a penalty to get their balance money back, while others are asking for longer payment schedule while waiting for the market to recover.
The owner of one project said that due to difficulties caused by the pandemic, businesses have been forced to share with customers that they are temporarily stopping the next collection and extending payment time. As the market is rather gloomy, many customers cannot pull out so they do not want to continue to invest, and prefer a return or have asked to suspend paying installments until the market recovers again.
