Real estate transactions in areas east of the city such as districts 2 and 9 remain quiet even though the official opening to traffic of Thu Thiem Tunnel helps shorten the distance from developing outskirt areas to the city downtown.

Developed infrastructure, construction kickoff and complete connection are often used as excuses for property prices in districts 2 and 9 to move up in order to attract small individual investors. However, unlike the previous times, the market recorded a slight fall in both trading and offering prices of land lots and apartments in the outlying districts.

Lam Van Chuc, general director of Phuc Duc Real Estate Co., said the Thu Thiem Tunnel’s opening to traffic has little impact on land lot prices and trading volume in eastern HCMC, partly because of the gloomy picture of the market.

Similarly, the apartment segment also witnessed stagnant trade, especially after the owner of PetroVietnam Landmark project announced to offer a 35% discount in prices for the products in An Phu Ward, District 2 under the financial pressure.

The weekly market records of Vinaland Investment Corporation showed a slight drop in land lot and apartment offering prices of the projects in this area. Particularly, the offering prices of apartment projects have ebbed by 0.3-0.5% against the previous week.

For instance, the offering prices were VND19-22 million per square meter in Binh Minh condo project, VND24.5-25.5 million in An Phu-An Khanh project and VND19-21 million in An Hoa project. The price decline also occurred in high-grade apartment segment with Cantavil project being offered at VND31-37 million per square meter and Estella project VND31-33 million.

Likewise, land lot offering prices last week decreased by 0.3-0.7% over the week before that, as seen in several projects in An Phu-An Khanh, Binh Trung Dong and Thanh My Loi of District 2.

For example, the respective land lot prices of the projects Binh Trung Dong Cat Lai, Thu Thiem East and Thanh My Loi-Huy Hoang were VND16-17.5 million, VND22-24.5 million and VND34.5-40 million per square meter, a drop of 0.6%, 0.5% and 0.3% week-on-week respectively. The same happened to other projects like Thanh My Loi-Phu Nhuan, Van Minh and Century 21.

Chairman Tran Minh Hoang of Vinaland ascribed the price discount and trading decline to the unfavorable financial situation along with the troubled property market. In addition, customers are afraid of the complicated legality at the land lot projects in the area.

Hoang stated customers tend to buy property products with land use right certificates available and clear legality. This facilitates the buyers when they need to transfer the property to others.

According to a market survey by Savills Vietnam, the average secondary prices of villas and semi-detached houses in HCMC tended to decrease significantly since late 2010, with the prices recorded last quarter dropping by 16% over the same period last year.

The property service provider said the primary supply mostly comes from eastern city, or districts 2 and 9, while the secondary supply is distributed in the southern, including District 7 and Nha Be District. These two areas also offer a large supply of land lots.

Savills expected some 1,700 villas and semi-detached houses would be launched into the market in the short-term from now to 2012, and at least 3,000 would be added in the 2013-2014 period.

(Source: Vietnamnet)