Apartments are becoming more and more important to people’s lives. Every year, cities like Hanoi, Ho Chi Minh City open to sell tens of thousands of apartments. People increasingly see the advantages of life in an apartment compared to townhouses, compound areas: convenient location, lower costs, guaranteed security, full facilities …
Condominium buyers, whether for living or for investment, are concerned with how an apartment price increases or decreases. Knowing the increase / decrease cycle of an apartment will help you plan, invest in at the right time, and be more efficient.
1. Open sale period
When opening the first sale, because of the new project, people are still skeptical, plus sometimes the legal is not transparent, the investor offers many preferential policies to attract buyers: discount, reduce purchase price. The first phase, support with bank interest, car vouchers, 3-year management free, draw prizes … As the project became known, the construction of the buildings gradually appeared, many officials More projects, of course, investors will reduce incentives.
But to buy goods from the first phase is not easy, it is necessary to deposit goodwill from before but to have rumor price, when matching the apartment to know the official price, like in the feudal era, when I got married, I heard the description was her. So pretty, until the wedding opens the veil to see if my wife is really beautiful …
Many projects with goodwill deposits for a long time, even a year (typically Rainbow GrandPark), will not be sure when they open for sale. The investor bases on the amount of booking set prices, so sometimes he has deposited for the whole year, but when the order is matched at a surprisingly high price (the bride is not as pretty as I think), she has to pity on the deposit.
In recent years in Ho Chi Minh City, many investors who bought the project right after opening the project had good profits, even changing the name at the opening of the sale could also earn a few hundred million.
Some sales also advise customers to buy as soon as they open for sale, every type is profitable, creating a Fear of missing out effect, customers at the opening ceremony decide very quickly, regardless of the selling price. . In fact, not all projects are profitable, for example One Verandah currently has to cut losses to 500 million / unit, so is The Mark.
Opening for sale in the first phase is often the apartments are not beautiful, the location is far from the center of the area, the view is bad, so if you should consider living, you may have to low price for houses you do not like.
2. Opening of the next subdivisions of the project
Large projects have many different buildings (Palm, Feliz En Vista, Empire …) or many different subdivisions (Grand Park, Ocean Park, Aqua …) and the opening price of the subdivision after the majority is much higher. much more than the first stage.
• Objective reasons: The subdivisions after the location are usually nicer, better completed, the surrounding price level has also increased compared to the first phase, the legal procedures are clearer, the infrastructure looks clear. more clearly …
• Subjective reasons: No matter what, project owners often set higher prices for later stages, to create the feeling that project prices are increasing. For investors, high or low price is a relative concept, price increase is important. In fact, if the price is high and still can increase, investors will continue to close the application. Furthermore, the continued price rise is a component of FOMO, further motivating buyers. A basic principle of the market, when the price increases, people compete to buy, when lowering the price, investors will continue to wait for the price to go down further.
Due to the higher latter stage prices, some early stage investors were able to take profits. The reason, the view may be a little worse, the finishing may be a bit worse, but for the same project, buying the first stage price is still much cheaper and still enjoy the benefits of the project.
In fact, Masteri Center Point / Origami price is much higher than Rainbow, the after court of Palm, Feliz en Vista, Empire price is also much higher than in the first stage.
3. Preparation for handover:
In the usual way of thinking that when the house is built, all facilities begin to appear beautiful, people will think house prices will continue to rise. Actually, the house price handover period often drops, due to the pressure to pay the last time.
For domestic investors, the last payment usually accounts for 30% of the contract value.
For foreign investors, as required by law, the last payment usually accounts for 50% of the contract value, especially for projects up to 70% (One Verandah).
There are quite a few people who buy an apartment to invest until the end, often not financially prepared and will try to sell out before handing over their house, causing considerable supply pressure to reduce prices. Consumers, investors with financial resources, carefully observing this stage can find surprisingly cheap apartments, even 100-200 million VND compared to the market price.
One Verandah is a prime example of handover pressure. The project set a high price from the beginning, 70-80 million / m2, 30-40% higher than other projects in the area, but the payment schedule is very light, only 25% until receiving the house. Many people think that the price is the price of the future, spend a small amount of money to buy for surfing, when the project is handed over will be a big profit. In fact, that future price may be set for 2025, not 2020, partly due to Covid’s impactSo many investors sell at a loss while receiving houses.
Financial pressure at handover may be mitigated when the project is interest-free by the bank in its early stage. For example, Rainbow GrandPark is financed by a bank, so interest / payment pressure only becomes heavier when the interest free period ends. It is expected that in the near future, when this deadline comes, house prices in Rainbow will be under certain pressure
4. The first year after receiving the home
Those who survive the receiving period usually receive the fruit during the first year, house prices increase due to:
There is no more supply pressure, there is no pressure on supply
New house, fully equipped, beautiful, the shophouse gradually operated.
Residents gradually moved in, the good reviews of the project, the real demand for accommodation increased
Central Park at handover price also decreased significantly, even some units had to cut loss, but in the first year the price increased by 20%. Palm, Feliz En Vista, Estella Height also increased well after the handover.
5. The following years of the project
Usually in the first years, the price will increase slightly because residents continue to stay in crowded, convenient, and more complete shophouse.
Sudden factors may increase the prices of delivered apartments:
• Transport infrastructure development, paving the way to the project (Palm Height, Jamila benefits from parallel roads),
• There is a commercial center, a large landmark building next to it. Central Park’s Landmark buildings prices increased significantly when Landmark 81 opened.
• Another project opened for sale right next door at a much higher price. Golden River Bason price increased well when Centennial opened for sale.
The rest of the apartment buildings have been handed over for a while, without the above special factors, there is usually no price surge. The price may increase slightly, or decrease slightly, depending on the project, location, time.
Knowing the laws of condominium price changes is important not only for investors but also for home buyers. Sometimes you do not have to rush, wait for the opportunity to hand over the house, you can buy a house to live at a surprisingly reasonable price.
Note: the above article applies more accurately to the HCMC market. In Hanoi, the majority of apartment prices go flat or down.