The recent cooling of the HCMC property market has begun hitting the apartment segment, as evidenced by the falling demand in the first five months of the year, Lao Dong newspaper reported, citing a report by the HCMC Real Estate Association (HoREA).

According to HoREA, the recent cooling of the HCMC property market has begun hitting the apartment segment

The fire scare triggered by recent blazes and rising disputes between housing developers and residents are to blame for the slackened demand, HoREA said.

In HCMC, 29 projects were introduced in the five-month period, marking a year-on-year decline of 9.4%. In addition, nearly 9,200 apartments were put up for sale, plunging 44.5% against the year-ago period.

The total number of apartments included more than 3,800 high-end units, down more than a quarter against the same period last year but accounting for 41.8% of the market.

There were nearly 3,500 units in the mid-end segment, down 32.6% year-on-year and representing 37.7% of the total. Meanwhile, 1,881 affordable apartments were supplied in the period, down 69.7% compared with 6,200 units in the same period of 2017 and making up only one-fifth of the total, down by nearly half, year-on-year.

The HoREA report also showed a decline in the number of new housing projects. In the January-May period, the HCMC Department of Construction granted construction licenses for some 19,700 projects, a year-on-year drop of 31%.

In Hanoi, though specific statistics on the real estate sector’s performance in the first months of the year have yet to be publicized, housing developers reportedly had difficulty selling apartments. In particular, an investor sold only eight apartments in the period, well below the 50 units sold per month as of late last year. In another project with over 400 apartments put up for sale since late last year, only 30 units have found owners.

The situation has worsened in the last two months, spurring investors to increase the liquidity of the market.

After an inferno at the HCMC-based Carina Plaza condo complex, investors have reduced apartment prices by some 5% to attract buyers.

The Ministries of Public Security and Construction and the relevant agencies have also tightened checks on fire fighting and prevention systems in apartment buildings. However, seven condos have yet to be equipped with these systems.

In Hanoi, investors have raised commissions for distributors by 0.5-1% to 3-4.5% of apartment prices. Others have even paid brokers 3% of the apartment value plus bonuses of VND10-20 million per apartment.

SGT