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Real estate developer announces impressive price decreases   2009-02-18 - Tien phong

The news that HAGL Land announced on February 16 with the sharp price decrease of up to 40% for its apartments in HCM City has caught the special attention from the public. This was for the first time a real estate developer spontaneously slashed the sale prices of its apartments.


The impressive decrease of US $1,000/square metre


Clients seek information about Hoang Anh River View's apartments

HAGL Land announced at the end of 2007 that the average price of the apartments under Hoang Anh River View project in Thao Dien ward, District 2, HCM City would be US $2,300/sq m. However, HAGL Land on February 16 said that it has lowered the sale price of the apartments to US $1,350/sq m.


Hoang Anh River View project includes three blocks with 576 apartments which are considered by real estate investors as the good commodities as the apartments are located in a good location with a view onto the Saigon River.


HAGL Land has also announced the price decrease from US $1,800/sq m to US $1,250/sq m for the apartments of Phu Hoang Anh project (the first phase) which includes five blocks with 802 apartments located along Nguyen Huu Tho Road in Phuoc Kien commune in Nha Be district.


The Director of HAGL Land, Le Hung, said that the apartment price decrease is considered by HAGL Land as the ‘revolution in apartment prices’ in HCM City which aims to stimulate the demand.


When asked about the profit HAGL will get when it lowers the sale prices, Hung said that HAGL received the land plots a long time ago at low prices. As the prices of construction materials have been decreasing by up to 40-50%, the real estate developer believes that it will still be able to get profit with the lowered sale price.


Hung said that the quality of the apartments will remain the same with the quality promised by HAGL Land to clients when it kicked off the projects. Hung said that those clients, who paid money to buy apartments of the two projects at the initially set prices, will enjoy the new price levels.


Dang Hong Anh, the Chairman of Sacomreal, a real estate joint stock firm, said that with such a drastic price decrease, a lot of clients will return to the market. The buyers of the apartments will get the loans within fifteen years from four banks (BIDV, Vietcombank, Military Bank and Sacombank). The values of the loans will be equal to 70% of the apartments’ values, and interest rate of the loans is 10.5% on average.


HAGL Land’s and Sacomreal’s real estate trading floors said that by 5:00pm of February 16, some 300 visitors have come to seek more information about the apartments, and 101 clients have deposited for purchasing the apartments.


Prices have dropped to the bottom line


Lam Van Chuc, Director of Phuc Duc Real Estate Investment Company, said that in the last ten days, the company’s eight offices received a lot of visitors who came to purchase the project land in Districts 2 and 9.


“As a lot of buyers have slashed the sale prices by 50% from 2007, more successful transactions have been reported recently,” Chuc said.


“In 2008, I thought that the market would not recover until the end of 2010. However, I have changed my mind. With more and more transactions these days, I think that the market will warm up by mid-2009,” Chuc added.


Other real estate trading floors also said that more and more people want to buy land and apartments these days, as the bank loan interest rates have been decreasing sharply.


A real estate brokerage office in district 7 said that the project land in Trung Son residential quarter in Binh Chanh district is now offering to sell at between VND 23 million-VND 25 million/sq m, a decrease of 50% in comparison with one year ago.


“I can see signs of the market recovery from the warm transactions in the last two weeks,” said Le Hoang Chau, Chairman of the HCM City Real Estate Association.


According to Chau, one of the factors that will help the market recover is that investors have been trying to harmonize the benefit of investors and customers by lowering the sale prices. The investors accept to get lower profit, but in return, they can sell products and stimulate the demand.


“I expect to see the real estate market to warm up in this year, especially from June 2009,” Chau said.


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BUSINESS IN BRIEF 17/2   2009-02-17