Properties with steep discounts find buyers in the south

By Phuong Uyen October 31, 2023 | 08:52 pm PT

Apartment blocks and townhouses in Thu Duc City, Ho Chi Minh City in July 2023. Photo by VnExpress/Quynh Tran

People have been selling villas and townhouses at discounts of VND10-20 billion (US$417,000-834,000) and land plots at over 40% in the south in recent months.

After nearly two years of looking for land to buy, Nguyen Duc Hai, a civil servant in Binh Phuoc Province, bought a 140-square-meter plot of land in early October in Thuan An City, Binh Duong Province, for VND3.8 billion, VND2 billion less than the going rate last year.

Tuan, a real estate investor living in HCMC’s District 11, bought a townhouse measuring 168 square meters in Tan Binh District for VND11 billion also in early October. The owner has asked for VND18 billion eight months earlier.

Linh, a real estate broker in HCMC, said: "In the last three months I have sold four townhouses, one villa and one plot of land. All the sellers had to discount billions of dong (VND1 billion = $40,675), even tens of billions."

Minh, another broker, said since late August he has made 10 transactions, all involving discounts of VND2-10 billion.

Minh Chau, a land and townhouse broker in Dong Nai Province, said with many people using bank loans to buy lands, they are selling out at discounts to cut losses.

"Discounts of 30-40% will attract buyers."

Though still limited the secondary real estate market is indeed seeing successful transactions, though all at discounts of 30-40%, even 50%, from 2021-22 prices.

After a short-lived market frenzy in early 2022, the real estate market in HCMC and surrounding areas froze in the middle of the year, and the slump has continued until now.

The fall in prices slowed down in the second quarter in major urban areas, but continued to fall at dizzying speed in other places, including suburbs.

Vo Hong Thang, director of consulting services and project development at real estate service provider DKRA Vietnam, said the decline in prices is continuing, with land prices falling by 8-12% so far this year.

Most investors are struggling with bank loans, which account for 60-70% of the property value. More cash-strapped investors are likely to cut prices steeply to find buyers, he said.

Phan Cong Chanh, CEO of real estate developer Phu Vinh Group, said market research data shows 15-25% discounts have been common in recent months.

He expected the price falls to last another 12-18 months.

When the global economy and Vietnam’s monetary and fiscal situation improve, the real estate market would be in a position to improve, he added.