Apartments are becoming more and more important to people’s lives. Every year, cities like Hanoi and Ho Chi Minh City open for sale tens of thousands of apartments. People increasingly see the advantages of living in apartments compared to townhouses and compound areas: convenient location, lower costs, guaranteed security, full facilities…
Apartment buyers, whether for living or for investment, are interested in how the apartment increases and decreases in price. Understanding the up/down cycles of apartments will help you plan, invest in and out at the right time, more effectively.
1. Open sale phase
When opening the first sale, due to the new project, people were still skeptical, plus sometimes the law was not transparent, the investor offered many preferential policies to attract buyers: discount, purchase price reduction. the first phase, bank interest support, car vouchers, free management for 3 years, lottery for prizes… When the project became known to many people, the construction of buildings gradually appeared, many people were interested. If the project is more focused, of course the investor will reduce the incentives.
But to buy from the first batch is not easy, you have to make a goodwill deposit in advance to get the rumor price, when you match the apartment, you will know the official price. very beautiful, when the wedding ceremony opened the veil to know if my wife was really beautiful or not…
Many projects have made a long-term deposit of goodwill, even a year (typically Rainbow GrandPark), but even when they open for sale, it is unlikely that they will get the apartment. The investor is based on the amount of booking set price, so many times when depositing for a whole year, when the order is matched, the price is unexpectedly high (the bride is not as beautiful as I thought), so I regretfully hug the deposit.
In the past years in Ho Chi Minh City, many investors bought as soon as the project opened for sale from the beginning with good profits, even changing the name at the time of opening for sale could earn several hundred million.
Some sales also advise customers, should buy as soon as they open for sale, whatever is profitable, creating the FOMO (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 is currently having to cut a loss of up to 500 million / unit, so is The Marq, recently saw a number of apartments at Masteri Center Point also sold at a loss.
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 want to stay, you should consider, you may have to trade low prices with houses you do not like.
2. Opening and selling the next subdivisions of the project dự
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 following subdivisions is much higher. much more than in the early stages.
• Objective reasons: The following subdivisions are usually more beautiful, better finished, the surrounding price level has also increased compared to the first phase, the legal procedures are clearer, the infrastructure is also clear. clearer…
• Subjective reasons: no matter what, project owners often set higher prices later, to create the impression that the project’s price is increasing. For investors, high or low price is a relative concept, rising price is important. In fact, if the price is high but still can increase, investors still continue to close orders. Moreover, prices continue to rise as a component of FOMO, further motivating buyers. A basic principle of the market, when the price rises, people scramble to buy, when the price drops, investors will continue to wait for the price to go down further.
Due to the higher price of the later stage, some early stage investors were able to take profits. The reason, the view may be a little worse, the finishing may be a little worse, but the same project, buying the first stage is still much cheaper and still enjoying the facilities of the project.
In fact, the price of Masteri Center Point/Origami is much higher than Rainbow, the following buildings of Palm, Feliz en Vista, Empire are also much higher than the first phase.
3. Handover preparation stage:
The conventional wisdom is that when a house is built, all the amenities begin to appear beautiful, people will think that house prices will continue to go up. In fact, during the handover period, house prices often drop, due to pressure to pay the last payment.
• For domestic investors, the final payment usually accounts for 30% of the contract value.
• For foreign investors, as required by law, the final 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 apartments for investment to the final stage, often not having enough financial preparation and will try to sell out before handing over the house, causing considerable supply pressure to reduce prices. Consumers, investors with finance, observing this period can find surprisingly cheap apartments, even 100-200 million compared to the market price.
One Verandah is a prime example of handover pressure. The project’s price set is quite high 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 the house is received. Many people think that that price is the price of the future, just spend a small amount of money to buy surf, when the project is handed over, there will be big profits. The reality of that future pricePerhaps set for 2025, not 2020, partly due to the impact of Covid, so many investors sell at a loss while receiving houses.
4. The first year after receiving the house
Survivors of the transition period often reap the rewards within the first year, with house prices rising due to:
• No more pressure to sell, no pressure on supply
• New house, full facilities, beautiful, shophouses gradually operate.
• Residents gradually move in, good reviews of the project, real demand increases
Central Park when handing over the price also dropped quite a lot, even some apartments had to cut losses, but in the first year the price increased up to 20%. Palm, Feliz En Vista, Estella Height prices also increased well after handing over.
5. Later years of the project
Normally, the price will increase slightly in the first years because residents continue to live in more numbers, more complete utilities and shophouses.
Mutant factors that can increase the price of handed over apartments:
• Developed transport infrastructure, paving the way to the project (Palm Height, Jamila benefited from parallel roads),
• There is a commercial center and a large landmark building open next to it. The price of Landmark buildings of Central Park increased quite a lot when Landmark 81 opened.
• Another project opened for sale right next to it at a much higher price. Golden River Bason price increased well when Centennial opened for sale.
The rest, the apartment buildings have been handed over for a while, if there are no special factors as above, there is usually no price spike. Prices may increase slightly, or decrease slightly, depending on the project, location, and time.
Understanding the law of changes in the price of apartments is important not only for investors but also for home buyers. Sometimes you don’t have to rush, wait for the right time to hand over the house, you can buy a house to live in at a surprisingly reasonable price.
Cong Dong BAT DONG SAN