Year-end financial obligations force HCMC house sellers to cut prices

Thuy An, a real estate broker trying to sell a 60-square-meter house on Tan Binh District’s Nguyen Sy Sach Street at VND5.4 billion (US$215,130) or VND92 million per square meter, says prices in the area are down 5% from three months ago and 10-15% since the beginning of the year.

She thinks even the worst house in the district would not have been sold for less than VND120 million per square meter but for the economic situation.

"The need to quickly liquidate properties is high toward year-end. There are few buyers on the market right now, so prices are falling."

In a nearby alley, six houses are on sale at around VND3-5 billion (VND65-95 million per square meter).

Phu, a broker for real estate firm Dat Lanh in Tan Binh, says he recently sold a 52-square-meter house in the alley for VND4.2 billion, down VND450 million from September.

Quy, a broker for real estate agency Toan Thinh, says people can easily find a home at an affordable price because so many houses are on sale at the moment.

Some houses inside alleys are being offered at VND80 million per square meter in Tan Phu District and VND65-70 million in Binh Tan District, he says.

"Prices have fallen dramatically since July [when similar houses were sold at VND110-120 million]."

A director of a real estate agency in District 10 says independent house prices are down at year-end for the first time in seven years.

Since October the number of houses put on sale by his company has risen by 40%, he says.

In districts Binh Tan, Nha Be, Binh Chanh, and 12, small houses measuring 40 sq.m or less are listed for as low as VND1.7-1.9 billion.

Explaining the downtrend in prices, an experienced real estate broker says demand for independent houses is low while many owners are under pressure to repay debts at the end of the year.

In a rush to liquidate their assets and resolve their financial difficulties, they are forced to slash prices, he says.

Ta Trung Kien, CEO of property developer Wowhome, points out these houses have no commercial use and so only attracts the attention of people looking for a place to live.

"The prices of these houses are usually adjusted in response to real-time demand on the market. If the number of buyers decreases, so will the prices."

Dinh Minh Tuan, Batdongsan’s southern regional director, says that in the last five to six years, independent houses have grown increasingly expensive.

"Prices are dipping now only because of the year-end financial burden. If anyone is looking to buy a house, now is a good time to do so."

However, Trang Bui, CEO of property consultancy Cushman & Wakefield Vietnam, expects prices in the segment to fall even further.

Though prices have gone down by hundreds of millions of dong people are still not buying, which means demand and supply have not reached equilibrium, she explains.

If people want to sell quickly, they must lower their prices to match buyers’ affordability, she adds.