Southern property market sees villa, townhouse prices crash

Hien in HCMC’s District 7 recently bought a villa in an urban area in District 9 for VND10 billion (US$416,000), down from the VND17 billion quoted at the beginning of this year.

The prices of many villas in the area are VND3-4 billion down now, she said.

Prices in the city’s suburbs have fallen by 10-15% mainly because sellers are in dire need of money to pay banks, according to realtors.

In Dong Nai Province, villas and townhouses in an urban area project in Nhon Trach District have fallen by 18% to VND51 million per square meter, and in another such project in Bien Hoa City, by 30-35% to VND41-75 million.

In Long An Province, their prices have decreased by 28% to VND42 million.

But despite the falling prices, not many people are buying villas or townhouses since their rental yields are not high and potential buyers are waiting for prices to fall further, analysts said.

The average townhouse price of is VND333 million per square meter in Hanoi and VND209 million in HCMC.

The rental yields are 2.7% in HCMC and 2.2% in Hanoi.

Out of 144 townhouses offered for sales in Ho Chi Minh City and neighboring provinces in the third quarter, only 40 found buyers and most at less than VND10 billion, according to the report of real estate consultancy DKRA Vietnam.

Real estate trading website Batdongsan said demand for townhouses in Ho Chi Minh City and Hanoi fell by 70% and 80% year-on-year in the third quarter.

According to real estate consultancy Savills Vietnam, townhouse demand will remain weak this year amid the continuing economic difficulties.

Vo Hong Thang, R&D director at DKRA, said while financially strong investors could keep their villas and houses for the next six to nine months before selling them when the market thaws, cash-strapped investors would continue to offer them at steep discounts.