Apartment owners sell out at cost price as market turns bearish

[ASEAN NOW News]

Apartment projects in HCMC's Thu Duc District. Photo by VnExpress/Quynh Tran

 

Many investors are trying to sell off apartments even at cost price as the property market continues to decline relentlessly and banks tighten lending.

 

Consultancy DKRA reported the secondary market is subsiding due to rising interest rates as many investors are selling out to get rid of their loan burden.

 

Economist Dinh The Hien said sales are down by an average of 10 percent, and even 20 percent in places that were previously affected by manipulated demand.

 

With the central bank’s tightening of lending, investors with limited budgets are now finding it hard to buy while speculators are opting out due to low liquidity, he added.

 

"With selling becoming more difficult, many investors are reconciling themselves to lower profits and liquidating their assets."

 

Vo Huynh Tuan Kiet, associate director of consultancy at CBRE Vietnam, told VnExpress however that this is a much-needed cleansing of the market.

 

"The price drop also signals that investors’ sentiment is being affected by the tightening of real estate loans."

 

Tran Khanh Quang, CEO of property developer Viet An Hoa, said this is a common reaction but warned of a crisis in the market if the tightening persists until the end of 2022.

 

"[Limiting loans] will likely lead to a widespread sell-off."

 

Strong selling pressure has also hit the land market. In March, Duc, an investor, offered a plot of land in the south of HCMC for VND18 billion ($750,000). He sold it in July for VND15.3 billion, a 15 percent discount.

 

"The profit I made was less than what I expected, but my family is in need of cash," he said.

 

He had bought the land three years ago for VND12 billion.

 

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