HCMC property market heats up with available condos

The recent rising number of available condominiums in Vietnam’s southern hub Ho Chi Minh City, fueled by support from local banks, has given a big boost to the local property market after a stagnant period.

In the last few months, a huge number of housing projects to build condo blocks have been announced, attracting the attention of local house buyers.

In particular, buyers are falling for the attractive, low-priced condos within a housing program launched by a group of two local property developers and two banks, which will supply 20,000 to 30,000 condos.

The housing program’s affordable prices – a 36-square-meter condo reportedly only costs about 175 to 190 million VND (11,000 to 12,000 USD) – are making tremendous impressions on buyers.

The group says in the last 10 days, up to 2,900 customers have registered to buy its homes.

“We will apply new construction technology from South Korea to build those homes at competitive prices and of good quality,” says a member of the group.

Costly condos also selling

But it’s not only low-priced condos that are attracting buyers. Higher-priced condos in the property market, selling at 5 to 13 million VND (316 to 822 USD) per square meter, have also been selling strongly in the market.

A large number of projects developing higher-priced condos are being carried out, and more and more buyers are registering to buy them, according to developers.

But, probably the most popular with buyers are high-standard condos that cost more than 13 million VND per square meter, real estate experts say.

Despite their sky-high prices, wealthy buyers are still paying attention to these condos because of its convenience, experts say.

Some condo prices are even up to 17.5 to 33 million VND (1,100 to 2,088 USD) per square meter, meaning a 75-square-meter house costs about 81,400 to 156,600 USD.

Bank support

The support and involvement of local banks in housing projects are another reason for the revived property market, according to a property expert.

“It’s because banks are not only seen as lenders, but also investors in these housing projects,” he says.

So far, local banks have approved mortgage loans worth 19,200 billion VND (more than 1.2 billion USD), equivalent to 12.7 per cent of their total lending, according to official figures of the country’s central bank, the State Bank of Vietnam.

In almost all condo development projects, local banks have offered customers loans that are 50 to 70 per cent equivalent to the cost of the homes.

Thus, the fact that banks will offer home loans equivalent to 70 per cent of a house’s value has helped attract buyers of the low-priced condo program, say developers.

Extended payback periods

Banks are also trying to attract loan borrowers by extending the time limit they have to settle their debts.

Several banks, including Vietcombank, Vietnam’s largest bank, and Techcombank, one of the biggest joint-stock banks, have extended their repayment time to 15 years.

Techcombank customers can also borrow money to buy furniture and other things for their homes.

Recently, Sacombank, another large joint-stock bank, also extended its payback period to 20 years to lure more borrowers.

One of the country’s largest retail banks, ACB, has said it will also lengthen its repayment period from seven to 10 years.

“ACB is negotiating with two international financial organizations to get access to low-priced sources of medium- and long-term capital. After that, the bank will further extend its time limit,” says ACB chief executive Pham Van Thiet.

Reported by Thanh Xuan – Translated by Hieu Trung
Story from Thanh Nien News
Published: 12 June, 2005, 12:05:12 (GMT+7)
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