Delayed housing projects restarted but find few buyers

The Hanoi Melody Residences, an apartment project in the capital’s Hoang Mai District began two years ago but delayed for a year, recently put units on sale.

Duc Hoang, a real estate broker, said these units cost VND60-70 million (US$2,360-2,750) per square meter, nearly double their launch prices.

The developer of QMS Top Tower, a premium project that has been stalled for four years, announced in August that new units were available for purchase at VND65-75 million, also twice their initial price.

In the country’s south, Astral City in Binh Duong Province and Ecity Tan Duc in Long An Province have also been revived after delays.

The association said the resumption of projects shows that the legal hurdles that stalled many have been resolved, and it could sustain developers and help alleviate the lack of housing supply.

But reviving stalled projects, many of which have deteriorated over the years, requires massive investment, meaning developers perforce have to hike prices, it said.

Finding buyers is another question altogether since people are wary about their quality.

Real estate agency Avison Young said many of these projects do not sell well, citing the example of Hanoi Signature, a project that has an absorption rate of just 20%.

Vo Hong Thang, deputy CEO of real estate agency DKRA Group, said real estate prices could not fall in major cities like HCMC and Hanoi, especially of products that serve housing needs.

Housing demand is rising while there are few new projects due to difficulties in finding land, lengthy legal procedures and rising costs, he added.