New residental buildings in the central city of Da Nang. Sales of real estate in the city this year plummeted by 80 per cent. — VNS Photo Hoai Nam

DA NANG (Biz Hub)— Interest in the property market in the central city is expected to rise in low and medium priced neighborhoods after the Da Nang People's Council announced new rates for 2014.

Under the new rates, land fronting Nguyen Van Linh, Hung Vuong and Le Duan streets will become the central city's most expensive real estate, with prices of VND25.2 million (US$1,200) per square metre or 37.5 per cent less, in comparison to last year's price of VND40.32 million ($1,920).

Meanwhile, each square metre of commercial real estate in the main downtown is to range from VND15.2 million ($723) to VND21.8 million ($1,038).

Further, a square metre of new residential property in outlying areas will be priced at VND5 million ($238).

The decreased price of land is meant to end the stagnation in the real estate market in the central city, as seen in recent years.

According to vice chairman of the city's Property Association Vo Van Cuong, sales of real estate in the city in 2013 saw a sharp decline of 80 per cent.

"It's actually a poor year for selling property in the city. We estimated that 12,000 plots of land from 26 projects had been available, even as they were intentionally offered with large discounts under special promotional programmes," Cuong said.

"In the final quarter of the year, investors offered a mass sale at reduced prices, but the city's property market saw a slump in different sections of resettlement and residential apartments and urban areas," he said.

"Sun Group, a property developer, has reduced sales prices for lands in its urban project in Cam Le District from VND500 million ($23,800) for a 100sq.m plot to VND340 million ($16,200)," he mentioned.

He added that the Golden Hills urban project in Lien Chieu District has offered the public a 50 per cent price decrease, from VND4.5-5.5 million per square metre to VND2-2.3 million, to boost sales in the final quarter of the year.

Meanwhile, Nguyen Minh Tien, a real estate broker, said land prices in the central city have been falling sharply.

"Investors could earn a big profit from lucrative land purchases in the past few years, but they rarely spend money in property speculation. Brokers now only expect a small profit to deal with huge inventories," Tien said.

He also suggested that speculators would earn profits in the long term through the purchase of small and medium plots for housing.

Investors also offer a five-month deferred payment for land plots valued at VND500 million to lure buyers.

The vice chairman of the Da Nang Property Association, Cuong, said he expects apartments with prices of VND3-5 million per square metre would be attractive to buyers in the first quarter of next year.

At the same time, tourism property developments has attracted foreign investment.

According to the city's investment promotion centre, investment in resorts and tourism made up 22 per cent of the city's total FDI projects in 2013. — VNS