VNEconomyNews.com - Speculators and secondary investors in Hanoi are dumping apartments to cut their losses and pay back bank loans.
Speculators and secondary investors are desperately flogging apartments at prices much lower than market rates.
For example, speculators in The Pride in Le Van Luong street are now offering their apartments at VND17.5 million ($841) per square metre compared to more than VND21 million ($1,000) two years ago.
“This price, I think is more reasonable and affordable to end-users. It matches the quality, schedule and the location of this project,” said Nguyen Hong Ngoc, a 40-year-old Hanoian rushing to find an apartment to buy.
In FLC Landmark Tower in Le Duc Tho street, speculators are now selling at VND23 million ($1,095) per square metre, but was quoted at VND30 million ($1,428) last year. Domestic real estate developers are especially being hurt, hit by a lack of capital investment and low liquidity.
Phan Xuan Can, chairman of real estate consultancy SohoVietnam Company, said that speculators and secondary investors had suffered from a 20 per cent loss during the last three months. “Many speculators bought apartments, but cannot meet payment deadlines and must sell apartments,” Can said.
Pham Thanh Hung, vice president of Cen Group, said it was very difficult for developers to sell apartments at their quoted prices, because many buyers were speculators and secondary investors and they were selling at prices much lower than the levels developers are offering.
For newly launched projects, some developers are lowering prices. For example, an unfurnished apartment of Thang Long Garden in Minh Khai street is now sold at VND18 million per square metre ($857).
It would be added around VND3 million of finishing to a square metre and these two sums together are still lower than the price which the developers sold last year (from $1,238 to $1,333 per square metre)
CBRE executive director Richard Leech said secondary market prices had continuously reduced since the second quarter of 2011.
In the primary market, developers further softened prices, with 53 per cent of newly-launched units priced below $1,000 per square metre, a pattern rarely observed since 2007’s residential market boom. In the secondary market, asking prices continued the downward trend that started in 2011’s second quarter.