Several luxury real estate projects in Hanoi are finding it hard to sell their housing, and they’re forecast to remain unsold for next decade despite discounts of up to 50%.

Houses remain empty despite discounts

Many people have deposited billions in luxury houses but are hesitant to settle their remaining payment upon the investor’s request or are trying to sell the house amid a market slump.

Nguyen Tuan Hung, a real estate broker, currently owns two house blocks worth dozens of billions of VND at Bac An Khanh urban area in Hanoi’s outlying district of Hoai Duc. He is struggling to sell the houses.

The villas are now something like Hung’s “debt” as the deadline to pay off for the investor is getting close.

After a period of price gouging, the prices of houses in several projects have sharply fallen, making it no longer an attractive investment channel. Several brokers who failed to sell their houses before the market fall are compelled to sit on their investments.

Villas at projects like An Hung new urban area in Ha Dong District have been completed but many buyers have yet to settle payment to take over their houses. This situation has put the project’s investor into major debt.

The same situation is recorded at a project along National Highway 32 as buyers are hesitant to pay from 10-20% of the remaining prices, equivalent to billions of VND.

Investors are struggling to settle debts by contractors along with dealing with arising expenses for maintenance of the empty houses.

Several experts estimated that housing blocks in outlying districts like Tien Son in Bac Ninh and some in Soc Son and Me Linh Districts may remain empty for the next five to ten years despite discounts of up to 50%.

Statistics from 13 investors showed that Hanoi now has 5,875 houses for sale. Many projects in Me Linh and Hoai Duc Districts had no clients in the first quarter of this year.

CBRE Vietnam said that among 9,000 houses completed in the last three years at several urban areas, 60% remain empty.

Do Thi Thu Hang from Savills Vietnam said demand for houses has sharply fallen as people await lower prices.

“Hanoi will have more houses with a combined area of 10,200 hectares of land from 76 projects in 14 districts. The municipal authorities are mulling over halting licensing commercial housing from now onto the end of 2014,” she added.