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Boom time for luxury apartments

Released at: 08:50, 31/03/2015

Boom time for luxury apartments

After a period of inactivity, the high end apartment market is showing rapid signs of recovery.

by Tue Lam

Hanoi, in the first quarter of this year, is witnessing a burst of activity in the high-end apartment market. In the quarter, four high-end projects have launched, an increase over the previous two years. In addition, the number of these properties has increased 20 per cent compared with the last quarter and 45 per cent compared with the same period of 2014. The number of unsold properties has also decreased over five consecutive quarters.

It can be said that Hanoi's real estate market is witnessing a new race between giants in the high-end apartment sector. The flurry surrounding the launch of the Park Hill project, which is the second phase of Time City's implementation of an urban ecological model, has heated up the market in recent days. In addition, the Vinhome Nguyen Chi Thanh project, after launch, had 70 per cent of its apartments purchased within the first 3 hours. The attention of customers showcased the promising prospects of high-end apartments.

Ms. Nguyen Hoai An, Senior Manager at CBRE, said that there are many factors creating such excitement. High-end projects are invested in by big names and are located in convenient locations with utilities such as entertainment complexes, schools and hospitals. The projects meet the living standards of most home buyers. These projects, therefore, attract plenty of attention.

For his part Mr. Jonathan Tizzard, Associate Director at Cushman & Wakefield, believes that the reputation of investors has become one of the prerequisites of customers when they intend to buy an apartment. It’s easy to see that investors are becoming more flexible and creative in their marketing of projects, specifically focusing on prospective buyers through the internet. Moreover, they are also more effectively using traditional marketing methods as well as bundled incentives such as free apartment management services, scholarships, preferential interest rates, and bundled interiors with the aim of attracting more customers.

In addition, a change in law will allow foreigners to own houses, taking effect in July 2015. This is one of the most important factors in creating buzz in recent years. Mr. Tizzard predicted that the number of foreign homebuyers will account for 20 per cent of total customers buying high-end apartments.  

It is forecast that high-end apartments will be the most exciting sector this year. Mr. Tran Ngoc Quang, General Secretary of the Vietnam Real Estate Association (VNREA), believes that while the macro-economic situation has many highlights, 2015 will be the year marking the return of real estate after a bleak period. “The apartment segment will be the focus of the market, of which high-end apartments will have a remarkable transformation,” said Mr. Quang.

Homebuyers, meanwhile, are more rigorous when investing in property. Projects with reputable investors, therefore, will be the top choice. Homebuyers also consider many factors such as design, management, other utilities and price. Furthermore, the ability to hire as well as profitability ratios in the case of buy-to-let are also considerations.

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