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Vietnam Business » Vietnam Real Estate Market News » Low-cost apartments selling slowly

Low-cost apartments selling slowly

Most of real estate developers now have shifted to developing low-cost apartment projects, because they believe that low-cost apartments will sell better than high-end apartments. Analysts also said that the demand for low-cost apartments is higher than the demand for luxury products.

The real estate market remains gloomy, which explains why even low-cost apartments are selling very slowly at this moment.

However, contrary to all predictions, the sale of low-cost apartments has been going very slowly, despite the attractive prices of the apartments

In April and May 2010, the developers of at least 10 projects launched their products into the market. Most of the products have the attractive price levels of between 12 and 15 million dong per square meter This shows that when marketing the products, real estate developers target medium- and low-income earners, who really have the demand for accommodations, instead of high income earners or speculators who prefer high-end apartments.

The Dai Thanh building project, for example, though located in inner HCM City, near Dam Sen area, has sale prices of 13 to 13.5 million dong. The price levels, according to analysts, prove to be very attractive if compared with the price levels seen during the land price fever.

Lilamas apartments, which have been introduced as high quality products, also have attractive sale price at 14 million dong per square meter.

Other projects, according to Dau tu chung khoan newspaper, also have prices many people can afford. Hai Thanh projects apartments, located in Binh Tan area, which are expected to be launched into the market this June, have the sale price at about 12 million dong per square metre, which is equal to the prices of the apartments in Tan Mai, Tan Tao and Binh Tan projects.

Babylon Residence 1 apartments in Thu Duc District, which have been praised as having high quality equivalent to the apartments of the well-known Sunrise, The Manor and Saigon Pearl projects, also have soft prices, at 15.1 million dong per square meter.

Nevertheless, despite the high demand for accommodations and attractive sale prices, the purchasing power now in the market remains very low. This has forced many real estate developers to launch promotion programs to boost sales.

The current noisy sale promotion programs have reminded people of the sale promotion campaigns seen in 2005, when the purchasing power was at record low before increasing sharply, causing "apartment fever."

When asked why the purchasing power remains so low despite the high demand for accommodations, attractive sale prices and sale promotion campaigns, Lam Van Chuc, General Director of Phuc Duc Real Estate Company, said there are many reasons behind this, including the high lending interest rates and the impacts of the economic downturn. Besides, speculators and investors do not want to inject money in apartments now also because they feel the market is uncertain. Meanwhile, those people who demand accommodations do not want to buy apartments right now, because they still hope the prices will go down further in the future.

Vietnam Business And Financial News Network. Source [english.vietnamnet.vn]

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