Speculators returning to City housing market?

Monday, Jul 06, 2015 08:00

Le Hung Vong

The HCM City real estate market is seeing an increase in people buying apartments to resell soon or lease out.

New Saigon Apartment on Nguyen Huu Tho Street in HCM City's Nha Be District is a popular address with expatriates who seek to live for long in the city.

The apartment, with facilities like tennis courts, a swimming pool, a minimart, restaurants, and drugstores, teems with Korean, Japanese, and Africans as well as locals.

Sai Gon Giai Phong (Liberated Saigon) newspaper quotes a sales agent at a property firm as saying that many apartments there are rented out, with one investor owning 10 units.

At nearby Phu Hoang Anh and An Tien apartments, purchasing apartments to lease out is becoming increasingly common.

Apartments in District 2 are seeing the same phenomenon. After buying an apartment at Imperia An Phu in 2007, Phan Hieu could not sell it after property prices plunged the following year. He decided to let out the apartment and earned a monthly rent of nearly US$1,000.

However, after prices went up again recently, Hieu sold the apartment for VND3.5 billion (about $160,000) and bought another in District 2.

Rents for apartments are higher than for houses. Hieu says he got $1,000 a month from the District 2 apartment compared to VND16 million (nearly $735) he got from a VND6 billion ($275,000) house he bought in an alley off Nguyen Dinh Chieu Street in HCM City's District 3.

To promote sales of their apartments, developers promise to let out the units customers buy while waiting for higher prices so that the latter can resell them for profit.

Him Lam Riverside, after handing over apartments to buyers, asked the owners to then furnish them to rent them out at VND16-18 million a month (two to four bedrooms).

According to Sai Gon Giai Phong newspaper, over 60 per cent of buyers at apartments like Him Lam, Phu My Hung, Novaland, and Hoang Anh–Gia Lai aim to rent them out.

The manager of a large real estate firm in HCM City, who does not want to be named, says the development of HCM City's real estate market should be divided into three stages.

In the past, when the city faced a property "fever", most people bought apartments as an investment.

In the following years, when the market was in a deep slump, most apartments were bought for buyers to live in and 20 per cent were let out. Now again most buy apartments as an investment or to let them out.

However, this could turn problematic in the coming years when thousands of new apartments are completed and put for sale in Districts 2, 7, and Nha Be.

Hieu fears it will take years for all the apartments on the market to be sold.

Land prices soar near airport site

Prices of land near the proposed Long Thanh International Airport in Dong Nai Province have increased after the project was approved by the National Assembly last week.

Newswire Thoi Bao Kinh Te Sai Gon quoted real estate agents as saying that prices have gone up by 20-30 per cent in July.

Brokers at the Dat Xanh Dong Nam Bo Trading Floor said prices of land at Victoria City, a housing project near the intersection of Provincial Road No 25B and National Highway No 51 in Long Thanh District, could rise by 20 per cent this month.

At Vinh Hung Phat company's Blue Topaz project, 100 square metre lots are offered at VND4 million per square metre.

But elsewhere, prices remain stable. For example, it costs VND2.5 million in the Long Duc Town project, which is around 2km from National Highway No 51 and 4km from the HCM City-Long Thanh-Dau Giay Expressway. Farm lands too are on sale in Long Thanh District communes like Long An, Suoi Trau, and Bau Can.

According to a local broker, farmers in Suoi Trau and Bau Can are offering 10,000 square meters for VND700-800 million.

Approved by the Government in 2011, Long Thanh Airport is scheduled to open in 2020 with a capacity of 25 million passengers a year, according to Dong Nai Province authorities.

To be built in three phases, it is expected to be fully completed in 2035 with a capacity of 100 million passengers.

Construction is scheduled to begin this year.

Bitter times for sugar industry

Following harvest of the 2014 –15 sugarcane crop, the sugar industry is facing serious difficulties since imports are dominating the market. According to figures from the Department of Agricultural, Forestry and Aquatic Products Processing and Trading, as of June 30, 42 sugar plants around the country have suspended operations (indicating that the 2014-15 crop has ended) after producing over 1.4 million tonnes of sugar, down 13 per cent compared with the previous crop.

As of June 15 sugar plants had stockpiles of 389,440 tonnes, 159,500 tonnes lower than at the same time last year.

According to the Viet Nam Sugar and Sugarcane Association (VSSA), white sugar now costs VND14,200-VND14,800 per kilogramme in the market.

Sugar smuggled in from Thailand, which costs VND13,000, is one of the challenges facing the local industry.

Sugar produced by Hoang Anh Gia Lai in Laos is also sold at VND13,300-VND13,500.

VSSA said HAGL had earlier sold at VND14,000 but then lowered the price to be more competitive.

The manager of a sugar plant was quoted by Thoi Bao Kinh Te Sai Gon as saying that HAGL had to lower its price when its sugar exports to China were hindered.

In past years sugar companies exported to China through unofficial channels to cope with the glut at home and illegal imports from Thailand.

However, recently China has been regularly closing its border gates to imports from Viet Nam. Vietnamese producers can become competitive if smuggling from Laos and Thailand is stopped.

According to VSSA, a Vietnamese consumes 16 kg of sugar a year and so the output this year is only sufficient for local demand. — VNS

Comments (0)