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Foreign real estate developers target low cost apartments   2010-05-09 - Viet Nam Net

Foreign real estate developers, who mostly invest in high-end apartments, now have begun eyeing popular low cost units.


Reports released by market survey firms have pointed out that while the demand for high-end apartments is lagging, low cost and popular apartments have been selling extremely well. Foreign real estate developers, who have realized the high demand for affordable apartments, have jumped on the bandwagon


According to realtor Tran Thi To Thanh from CBRE, foreign investors have been seeking new investment opportunities. Thanh said that CBRE have met many delegations of foreign businesses these days, especially from Malaysia.


Thanh said that many potential investors he meets have a good understanding of Vietnam’s real estate market. Some of the corporations once had projects or conducted market surveys here in Vietnam. “Maybe the investors excluded Vietnam from their list of investment destinations in the economic crisis, and now they decide to return to Vietnam after the crisis ends.”


Market survey firms have noticed that foreign investors now eye the popular apartment market. An official from the Ministry of Construction told VietNamNet that it is quite a new tendency that foreign investors invest in popular apartments, but it does not surprise him.


The official said that the interest in the popular-apartment segment was inevitable, because the sale of high-end apartments has been slowing down. Real estate developers once focused on building luxury apartments, they did not realize that the demand for popular apartments is also very high.


It is clear that foreign investors have shifted from one kind of undertaking to another. They have realized that the apartments with the sale price of some one billion dong are what the market demands, and at the moment the supply remains modest.


Dang Van Quang, an expert of a foreign group in Vietnam also said that he is not surprised by the fact that foreign investors develop affordable apartments. As investors, they will invest in any fields which can bring profit to them. Previously, they focused on high end apartments because this segment could bring high profit. Nowadays, they focus on popular apartments because they understand they do not have many more opportunities with high-end apartments


Besides, according to Thanh from CBRE, technical barriers have also made foreign investors hesitate to continue to make investment in high end apartments. The land fund for luxury apartments in the central area of Hanoi has become limited.


Regarding the sale prices, analysts believe that with the appearance of foreign investors on the market, the supply of popular apartments will be more profuse, which means more choices for buyers.


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