Property developers offer better deals to stir demand

Brokers at a 500-apartment project in outlaying Hanoi district of Hoai Duc are offering early buyers a VND300-500 million ($12,775-21,292) discount, or 9-12% of an apartment’s value.

Another apartment project in Long Bien District is offering 20% discounts if buyers pay 95% of the apartment price upfront.

One of the project’s VND4.2-billion apartments can therefore be bought for just VND3.3 billion.

Other projects are offering 6-25% discounts.

Some developers are also giving their customers loan interest incentives from two to five years. In the past, loan interests were kept unchanged for up to 18 months, but now some developers promise to keep it unchanged for up to 24 months.

Other developers are selling apartments with a commitment to rent them back right away and pay the owners 9.5-10% the apartment price annually as profit.

Luu Thanh Tuan, CEO of property developer Hoa Viet Land, said that promotions like these are important to lower inventories and increase cash funds.

CEO of property developer EZ Property Pham Duc Toan said that companies are doing everything they can to increase cash, which is much needed, to pay expenses such as bank debts.

However, these are only short-term solutions and the market is still an unfavorable one, he added.

Toan said that recent property prices have been inflated, and the current discounts are only actually bringing prices down to a reasonable level.

Experts also say that the promotions are too insignificant to thaw the frozen market.

The number of apartment sold in the first quarter was just 2,700, down 50% year-on-year, according to the Vietnam Association of Realtors (VARS).