Property developers adjust for market demand
By Dinh Dung - The Saigon Times Daily
HCMC - The trend of the mid- and low-cost apartment segment is expected to dominate the property market this year as many property developers have begun to tailor their products to meet market demand, providing affordable condos for mid-income homebuyers.
Most of the condo projects that have broken ground early this year are mid- and low-cost projects making people think this year will mark a joint year for the market shifting the demand from luxury apartments to the lower segment.
Le Hoang Chau, chairman of the HCMC Real Estate Association, said that what has been learned from the market tells property developers and investors to adjust their business strategy as well as to accept narrowing their expected profit margins to match market demand.
Some property developers have witnessed their business going strongly thanks to offering apartments ranging from VND500 million to VND1 billion each, while the luxury apartment segment has slowed.
Among the realty companies, such as Nam Long and Dat Lanh, who have targeted the low-cost segment for years, some other players have joined the market with condo projects dotting districts around the city. Those projects include Le Thanh, Tan Mai, Blue Sapphire Binh Phu, 584 Lilama SHB and Anh Tuan in the districts of Tan Binh, Binh Tan, 6, Tan Phu and Nha Be respectively. Several other developers have broken ground for projects targeting mid-income homebuyers.
Chau said that although the profit margin was narrowed when investing in the low-cost segment, it would help developers and investors grow firmly.
Nguyen Van Duc, deputy director of Dat Lanh Real Estate Co., supported this idea, saying this year would be a hinge year for developers to adjust their business by developing more low-cost apartments rather than offering luxury apartments.
Duc said the luxury apartment segment had accounted for 70% of the apartments in the market, but the trend of the low-cost segment would take the market this year, drawing the attention of investors and buyers thanks to its liquidity.
Like other property experts, he said the market had begun to see competition among developers as there were more and more low-cost condo projects joining the market.
According to the market research company CB Richard Ellis, 28,000 apartments from 57 projects will be launched to the market this year, including 10,000 mid-end apartments and 5,000 low-end apartments.