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Property market prices cool

In Uncategorized on October 13, 2008 at 12:10 pm

HCM City’s Phu My Hung urban area. Property prices have fallen by 40-60 per cent since the Lunar New Year. — VNA/VNS Photo Van Khanh

HCM CITY — Builders are trying to attract prospective house buyers to take advantage of the recent drop in prices in the real estate market.

According to market research experts, property prices have fallen by 40-60 per cent compared with the days following Tet (Lunar New Year), when HCM City’s property market was on the rise. In the past few months, prices have been at a standstill.

Small-time speculators, or short-term investors, who snapped up property when the real estate market was doing well, are now selling out to repay debts and fleeing the sector as banks have tightened property loans.

Before the drop in prices, customers had to buy apartments via brokers and suffer a difference of hundreds of millions of dong per house in commission.

This is a good time to buy for those who want to own a house as the market is dropping to its “bottom,” according to Do Tien Duong, a property investor.

“Also, the stock, gold and dollar markets have been unstable, which can drive people to invest in real estate for savings,” Duong said.

Developers are attracting individual customers by offering apartments for sale at low prices to carry them through the current crunch, when few property brokers are willing to invest.

Last month, for example, Phu Long Property Joint Stock Co. signed 100 customers to its Phu Hoang Anh Apartment project in Nha Be Commune at US$1,900 per sq.m during the first week of September.

Phu My Hung Joint Venture Co. is currently offering VND27 million ($1,700) per sq.m on its Sky Garden Apartments project. Apartments in Sacomreal Co.’s Phu Loi I project, District 8, are being sold at VND12.6 million ($788) per sq.m as well.

Due to recent government policies that have shut off credit to the real estate market, builders are trying to better the market and sell their apartments, according to Le Hoang Chau, chairman of the HCM City Real Estate Association.

True prices are returning, according to local property experts, who refer to the relationship between market prices and property value.

Real-estate transactions had not increased significantly, averaging only one to two transactions per week in the past three months, but it was a sign that the market was recovering after a long period hibernation, Duong said. —

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