Southern housing market continues to be depressed

By Nguyen Tieu   October 15, 2023 | 03:20 pm PT
Southern housing market continues to be depressed
Nha Be District in the southern part of Ho Chi Minh City in August 2023. Photo by VnExpress/ Quynh Tran
Market sentiments remain depressed in the south, precluding a revival in real estate liquidity.

The number of transactions remained low in the third quarter with absorption rates in the primary market being lower than expected and most apartment projects selling few units.

An executive at a housing development company based in Binh Duong Province said few people signed contracts to buy during the quarter. Nearly 40 people had paid deposits for buying his firm's project but only two ended up completing the transaction, he said.

"Our company offers a flexible payment program, but it is still not attractive enough," he said. "Perhaps the biggest obstacle in the market is the continuing wait-and-see attitude."

The director of a major housing firm in Ho Chi Minh City said efforts to stimulate demand only attracted small numbers of customers buying to self-occupy, and the low volumes are forcing companies to reconsider sales schedules. "We may have to delay sales until early next year."

Cushman &Wakefield Vietnam reported that the number of new apartments offered for sale n the third quarter was 3,790, nearly four times the previous quarter’s figure, but the absorption rate was only 42%.

There were also 766 new townhouses with 86% of them priced at over VND30 billion (US$1.2 million), and only 64 were sold. The absorption rate of 8% was the lowest since 2018.

A recent survey by property brokerage Dat Xanh Services found only 26% of respondents saying they would buy real estate when interest rates decreased, while 31% said no and 43% were not sure.

Buyers clearly remain cautious. Ngo Quang Phuc, general director of developer Phu Dong Group, said the challenges facing the property market are undeniable and the difficulties could persist until the middle of next year.

This year most transactions would be for apartments and townhouses people buy for occupation rather than investment or speculation, he added.

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