Some apartment building projects have been adjusted into house and villa projects because investors are having difficulty in selling apartments.
Apartment buildings along a Sai Gon River bank in Ho Chi Minh City (Photo: SGGP)
The apartment market was very buoyant in 2007. During that time, apartments sold as soon as construction on them started.
Now, due to high lending interest rates, people do not want to borrow money from banks to buy property hence owners have no takers for their apartments. This has resulted in a surfeit of apartments.
Tens of thousands of apartments have no takers even though apartment owners are doing their best to lure buyers and even lowering selling prices.
In order to get back investment capital quickly, project owners have switched to building houses and villas rather than many apartments that are difficult to sell.
For instance, an area of nearly two hectares in District 7 in Ho Chi Minh City was an apartment building project with about 1,000 apartments. When the project was launched, its owner found it difficult to sell flats so he switched to building houses.
Customers then flocked to buy all the 100 houses that will be constructed on the 2-hectare area.
Similarly, an apartment project in District 9 has been changed into a villa project after the owner realized that the apartment market was on the wane. The owner claimed that after the villa project was launched, most of the villas were registered quickly.
He said that owners did not profit greatly by selling houses or villas but they sell more rapidly than flats and investments are recovered quickly.
According to the HCMC Department of Planning and Architecture, some investors in Binh Chanh and Thu Duc districts and districts 8 and 2 have asked for approval to build houses and villas rather than apartment buildings.
An authority from the department said building houses and villas has become a trend to stimulate demands in the property market, which is in a slump. Therefore, relevant agencies should be flexible to approve house and villa projects depending on the location.
Investors should be allowed to develop houses and villas in areas that are far from the city center, close to the river or in rural areas.