Real estate developers in Vietnam are attempting to stimulate market growth with unprecedented offers for buyers.
Longer support for customers
Phu Dong Group’s Phu Dong Sky Garden project in Di An town, Binh Duong province has launched a new payment policy. Specifically, buyers can pay just a 5% deposit to sign a purchase and sale contract, and receive 100% interest rate support from the developer until they receive the keys to their home. After that, they will enjoy a fixed interest rate of 6% for two years. In addition, buyers are entitled to a grace period of two years from the first disbursement. The project is expected to hand over apartments to customers in the fourth quarter of 2024.
Thanh Thao, the group's sales director, said that many customers have chosen the option of loan interest support which means they only need to pay 20% of the apartment's value with the rest funded by a bank loan for which all of the interest will covered by the developer until they receive their homes.
After apartments are handed over, Phu Dong Group will continue to support customers for another two years by keeping interest at 6% per year. "No matter how much banks raise interest rates, we still support customers with a fixed interest rate of 6% per year. This policy is expected to clear all customer concerns that interest rates will rise after the support period expires," Thao said.
A number of other projects have also launched attractive offers, creating a positive effect on the market. For example, the Glory Heights project located in the Vinhomes Grand Park urban area in Thu Duc city has broken the ice in the Ho Chi Minh City property market, with 3,000 out of its 3,500 apartments selling just a day after launch. However, most of them were ordered by trading floors and agents.
This project offers customers the option to defer payment for seven years without interest. Before receiving the house, customers pay 50% of the apartment value over three years. When the home is handed over, they pay another 45%. If they use a bank loan, the principal will be graced for four years since the date of disbursement.
Another project in the Vinhomes Grand Park urban area is Masteries Center Point, that has introduced a policy that allows buyers to pay 35% in the first three years and 5% per month from the fourth year.
On Saturday, HCMC-based Rio Land announced that apartments in its Hybrid building, one of the five blocks at the MT Eastmark City project in Thu Duc city, will be sold for VND42 million ($1,780) per square meter, which is said to be the cheapest in the southern economic hub’s eastern area.
The developer also revealed incentives for homebuyers, including a 24-month sublease, 25-29% discounts, a principal grace period until the apartment is handed over, 30% payment over six months until receiving the house, a free furniture package worth VND100-200 million ($4,230-8,460) together with 3-year management fee, and 2-year car parking fee.
Meanwhile, in early July, Nam Long Group launched a new sales policy for the Grand Villa at its Waterpoint project in Long An province, which borders HCMC. Specifically, customers pay 20% of the house value within 18 months until they receive the home. At the time of handover, the customer pays another 10% and the bank disburses 65%. The developer gives support by keeping the loan interest rate at 6% for 12 months, and commits to lease the house within 18 months with a profit of 4% per year.
Shortage of new apartment supply
A real estate market report by Dat Xanh Services, a service arm of developer Dat Xanh Group, showed that in the first half of the year, the supply of new apartments in Vietnam continued to decline. Legal bottlenecks caused new apartment supply in Hanoi and Ho Chi Minh City to decrease by 91% and 89%, respectively, from 2022. The supply mainly came from projects implemented many years ago, which accounted for about 90% of the primary market in Vietnam’s key regions or about 38,000 units.
In Hanoi and the surrounding areas, there are not many options for sale. The shopping cart in the North mainly features the inventories of old projects such as Vinhomes Ocean Park. The apartment segment dominates the Hanoi market, mostly from small and existing projects such as Rose Town of Xuan Mai Corp. and The Matrix One of MIKGroup.
The southern market is also in the same situation. In Ho Chi Minh City, the shopping cart in the primary market mostly features apartment products in the eastern area, but supply has decreased 70% from the same period last year, mainly from the next phases of existing projects such as Vinhomes Grand Park, Lumiere Boulevard of Masterise Homes, and The 9 Stellars of Son Kim Land.
In Binh Duong province, apartment supplies mainly come from the next phases of existing projects in Di An, Thuan An and Thu Dau Mot towns like Phu Dong Sky Garden, Bcons City, Lavita Thuan An of Hung Thinh Land and The Maison of C-Holdings.
In Long An province, low-rise house supply still dominates, coming from Waterpoint Long An project of Nam Long Group and Diamond City of Thang Loi Group.
Particularly, in Dong Nai province, about 95 kilometers from HCMC, the supply has plunged in the primary market due to limited new projects.
According to Dat Xanh Services, the difficulties lasting from the end of 2022 to the first half of 2023 are clearly reflected in scarce new supply and a very low absorption rate of about 10-15%.
The market in the second half of the year will fall into the hands of buyers, when attractive policies and payment methods are introduced to attract customers, it said.
It cited a survey showing that 82% of customers choose apartments priced under VND2.5 billion ($105,700), 13% prefer apartments from VND2.5-3.5 billion, and only 5% want those worth over VND3.5 billion ($148,000).
Many indicators signal that real estate market confidence will gradually return from the end of 2023 or the beginning of 2024, it said, adding that government's policies are expected to start proving effective, becoming a driving force for the market’s development.