Cheap real estate still in low supply compared to middle and high-grade

More than 2.500 successful transaction in October. Source: Internet

According to the Association, the property market witnessed an increase in prices in some segments of the market and the race of sales of enterprises at the end of 2016. The market is entering the most exciting phase of the year.

According to the Real Estate Association's report, in the last sprint race of enterprises, a series of projects have been opened or continue to open new sales. With a large supply and high competition, many companies have many promotions to boost liquidity such as gold gifts, cars, televisions, refrigerators, furniture, high discount, etc.

According to representatives of the Vietnam Real Estate Association, though booming in supply, the market is still in shortage of products in the cheap segment. In Hanoi, in the amount of new projects for sale, the few projects in the cheap segment introduced were located far from the center (Hoai Duc district) such as The Golden An Khánh, Thang Long Victory, etc.

Also in this month, in HCMC, the market had plenty of projects with the prices of one billion VND offered such as La Astoria, Moonlight Residences, Richmond City, EHomeS Phu Huu, etc. However, the market has a similar situation to Hanoi, the majority of projects with the price of 1 billion VND are located in the suburban areas. According to experts, the supply of cheap real estate still low compared to the segments of medium- and high-grade and luxury.

This phase shift was stressed again by the chairman of Vietnam Real Estate Association in the Investment apartment – property workshop within the framework of the international exhibition in the 3rd Vietbuild 2016 which took place in Hanoi.

Giving the analysis on the situation of the property market, Mr. Nguyen Tran Nam, Chairman of Vietnam Real Estate Association said that: “Vietnam currently has 33% of the population living in urban areas. Thus, the potential of the property market is still very large because the urbanization rate of Vietnam is at 1% per year. It means that 1 million people move from rural areas to urban areas each year so it creates single households and young families that generate a huge housing demand.

In the short term , the market is growing positively, the transaction is increasing but prices are stable, the market meets the demand because there are residual products after the property crisis. However, Mr. Nguyen Tran Nam also emphasized: "The market is tending to focus on high-grade real estate and lack of projects for average price, consistent with the ability of the majority of people. This is a reason that leads to difficulty of some companies in selling resort style real estate."

According to Mr. Nam, coming investors should research the market to produce products aimed at the segment of people likely to buy, because experience has shown, real estate from 1 to 2 billion VND are very easy to sell either condotels or condominium (apartment - hotel).