More housing opportunities for low-income families 

Nguyen Van Duc, Director of Dat Lanh Real Estate Company, is not optimistic about the real estate market as a whole this year. He observed that many big housing projects in Hanoi and HCM City remain largely vacant.

Even after having been completed for two years, housing projects in HCM City have more than 1,000 vacant apartments, with only a few dozen having been sold. This comes after site clearance and resettlement projects to make room for such projects.

"It has been estimated that in both cities the number of unsold apartments has mounted to about 150,000. This is a result of price-gouging, which has set the prices out of range of most people," Duc commented.

According to Duc, to deal with the situation several real estate firms may have no choice but to reduce their prices.

“Investors of projects that have already been completed will likely lower their prices by 10%-20%, while those still under construction may apply sharper price cuts of up to 40%. This year would be a thriving period for low-cost and small-sized apartments. Many people might be able to afford prices of VND12-15 million (USD573.90-USD717.40) per square metre. These are mostly in the outlying areas of Hanoi and HCM City," he said.

This also put a downward pressure on the prices of unsold high-end apartments or force their investors to divide them into smaller units, he noted.

The chairman of board of director of an unnamed real estate transaction floor said that due to the current economic climate many investors are being forced to reduce costs in order to cut selling prices in an attempt to attract buyers.

He added that the pace of construction may be sped up on many projects.

“Selling uncompleted homes is just a temporary solution, and cannot improve the situation in a sustainable way. The market cannot rebound without an improvement in the availability of capital and government support. In the future real estate prices are likely to decrease by another 15%,"

CB Richard Ellis (CBRE) Vietnam has estimated that this year would be a difficult one for the real estate market, as more new apartment projects are launched amid an already saturated market. In Hanoi alone around 20,500 apartments are still unsold.

“It would take from one and half a year and four year to sell out those apartments, depending on the speed of market rebounding,” CBRE said.

Low-cost housing on the rise

Nguyen Huu Cuong, Chairman of Hanoi Real Estate Association said, “The market will continue to undergo see tough times this year. However, there will be a wave in the low-cost housing of around 30 square metres per unit, with prices of around VND500 million (USD23,912) each by the end of the second quarter or early third quarter. This is a result of the government’s land use incentive policies, opportunities to access long-term soft loans and decreases in corporate income tax and valued added taxes.”

“In order to survive, investors have been compelled to further cut prices and add more promotion programmes to attract buyers. Better lending policies for home buyers would also help improve the situation,” Cuong said.

Vu Cuong Quyet, Director of Northern Green Land Real Estate and Service JSC said that this year would be part of a continuing period in which investors seek solutions to deal with unsold homes.

“There will a 'race to the bottom' in terms of pricing. A few new luxury apartment projects will be launched this year, but those from the previous year are still around and will affect this market. For those who have a real need for housing, this will be a good time, as prices continue to fall closer realistic levels," he said.