Property owners stop making fire sale, expect market recovery

By Nguyen Tieu   December 8, 2023 | 05:43 am PT
Property prices have stopped plummeting as owners, seeing positive signs in the market, are choosing to hold on to their assets believing a recovery is around the corner.

Ngoc, a senior banker, put her 38.4-square-meter house in HCMC’s Phu Nhuan District on sale in early October, but has now decided to wait.

She was offering it at VND5.3 billion (US$ 211,100), 20% less than in 2021, and was even willing to come down to VND5 billion.

But she was unable to sell it, with most buyers haggling down the price to VND3.5-4 billion.

She said: "The house is not in use, so I just wanted to get my money back. I am not under any pressure to cut losses."

Phuc of HCMC’s Thu Duc City has stopped trying to sell a land plot in Thu Dau Mot City he had bought for VND3.6 billion in 2021.

He said: "At the price I was offering, I would have incurred a VND400 million loss, but buyers were asking me to lower the price further. So I decided to just wait for the market to recover."

A recent VnExpress survey found an increase in the number of property owners breaking off previous deals with buyers after lending interest rates declined and some new policies to support the property market were announced.

In the townhouse segment, most deals were called off because owners hiked their prices.

Meanwhile, amendments are being made to the laws which will severely restrict the division of lands into smaller lots. This is likely to push up the prices of small plots of land, and so many owners are choosing to wait until they take effect in January 2025.

The director of a real estate brokerage in HCMC’s Nha Be District said many deals, some very close to completion, have fallen through in recent times.

Property owners have become optimistic now that buyers are flocking to the market, he claimed.

According to a report by real estate agency DKRA Group, price cuts of 30-35% were much less common in the land and townhouse segments in November.

Average prices in those segments in HCMC are down 3-10% from a year ago.

Realtor and developer Dat Xanh company said prices of apartments and townhouses are up 2-3% in some locations on the secondary market.

Dr Pham Anh Khoi, head of market research at Dat Xanh Services, said the property market has more or less bottomed, and new policies and positive changes in the market could signal a turnabout to investors, who have stopped trying to cut their losses and are waiting for higher prices.

But the market would make a very gradual U-shaped recovery, meaning it would take until late 2024, he said.

Investors should not hope for a dramatic turnaround next year, he warned.

Le Hoang Chau, president of the HCMC Real Estate Association, said the property market still has to overcome a lot of difficulties to fully recover.

Ngo Quang Phuc, CEO of real estate company Phu Dong Group, said it would take six to 12 months for the market to recover.

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