Sales of grade-C apartments dramatically surpassed high end segments

By An Chi - Jul 12, 2018 | 04:57 PM GMT+7

TheLEADERThe grade-C apartments which are priced at under $50,000 are sold well, accounting for 73 per cent of the segment's liquidity, followed by grade-A ones with prices below $100,000, according to Savills Hanoi's report.

Sales of grade-C apartments dramatically surpassed high end segments
D'. Capitale project located on Tran Duy Hung street

A recently released report on Vietnam’s real estate market in the second quarter this year  showed that the new supply and liquidity of the apartment segment continues to increase.

Specifically, in the second quarter of 2018, 9,760 units were launched, up 77 per cent quarter on quarter (QoQ) and 43 per cent year on year (YoY).

The liquidity in the apartment market, according to Savills, remained stable with 7,500 units sold, increasing 31 per cent QoQ and 11 per cent YoY.

Do Thi Thu Hang, Associate Director Research, Savills Hanoi said that a number of customers were now more likely to choose projects in certain price ranges, depending on the segment. 

Savills' research showed that most of the grade-A apartments that have high liquidity were priced at from $50,000 to $100,000, accounting for 47 per cent of the segment's liquidity. The apartments that costed from $100,000 to $150,000 accounted for 37 per cent of liquidity.

"This shows that the above prices are reasonable and attract consumers. Highly-priced apartments that fail to satisfy the requirement on high quality and are not invested by reputable real estate firms face difficulties to attract customers," said Hang.

Many projects still had high liquidity, especially projects offering the asking price ranging from VND27 million ($1,173) to 35 million ($1,521) per square metre located in the districts of Tu Liem and Ha Dong.

In contrast, projects situated in Cau Giay and Thanh Xuan districts, except for Vingroup’s projects, which were priced at over VND40 million ($1,738) per square metre had low absorption rate or low liquidity. 

"The reason is that these projects have quite high asking prices compared to the quality and challenge of customers’ financial ability," said Hang.

“This is the reason why homebuyers are confused about the absorption rate of the apartment segment," Hang explained.

"Therefore, project apartments with low liquidity should have the quality reviewed and prices adjusted to suit the needs of the market." 

Hang added that most of grade-C apartments were bought for residence purpose while grade-A and grade-B apartments were purchased for investment.

The report estimated that in the second half of 2018, more than 14,300 units will enter the market from 20 projects, most of which are Grade B and Grade C.