Witnessing the decline in transactions of the 2018 third quarter, what do you think about the movements of the market in the forth quarter and over the next period?
Duong Duc Hien: “Actually, the third quarter has always been slow in transaction numbers every year. This is firstly because of the “seventh month” in lunar calendar that is deemed to have bad luck, hence, Asians tend to wait for their spot in the fourth quarter, leading to the decline in the number of transactions. The third quarter is also the period of confusion, business, and anxiety, while the fourth one is often for deal-closing, capital withdrawal, and Lunar New Year preparation. So the market is more exciting.
For the condo segment in the forth quarter, the right product for the right market demand at the right time will certainly create waves of transactions. In particular, apartments that are well received in traditional markets will be even better received in coastal cities.”
Mr. Duong Duc Hien, Sales Director of Savills in North and Central Vietnam
There is an existing paradox that in certain urban districts, prices of completed houses are cheaper than ones of future projects. Why is this paradox?
Duong Duc Hien: “There is a fact that market development is becoming very diverse. Of course, existing houses will often face several issues like house taxes, inappropriate use of property, fire protection problems, or out-dated interiors. It is the opposite for new houses.
Nowadays, people make many more preparations, and have more requirements than before, when purchasing a house. Thus, investors are required to have different investment projects and future projects seem to be better suited to customer’s criteria such as location, and reputation of the investor. Besides, for these apartments, buyers are also financially assisted.
“100% interest-free for the first 18 or 24 months if you are buying a house” advertisement is available everywhere nowadays. Those policies are extremely crucial to customers who require financial leverage, especially in the first one or two year. Their savings may be enough to buy off the property, but they will be greatly benefited from financial supporting policies or mortgages. I agree that the market will also benefit from these contracts.”
Speaking of the financial side of the real estate industry, for the first time in Hanoi, a bank has tightened its credit for a building in Ha Dong. In your opinion, what is the loss for customers? And is there any legal crack in this situation?
Duong Duc Hien: In other countries, customers only pay 10 percent of any real estate transactions, the rest is due when the project is completed and handed over. This shows strong financial capability of foreign developers. Meanwhile in Vietnam, money is paid according to the construction process. 50% for the initial process and when it is noticed by the seller, then the remaining half will go into the book.
That is also why people need to pay attention if the project is committed to construction schedule and bank guarantee when buying a house. Especially when cheaper prices steer them away from carefully checking legal documents and procedures. Therefore, the reputation of the investor is critical and one of the most important criteria for Vietnamese when choosing a house.
Obviously clients are the one paying the money, so they must also be the ones paying close attention to what they are getting back. Particularly when the market is in high demand for transparency, project developers must provide accurate and sufficient information. In fact, at this point, visionary investors should be aware that vague, suspicious behavior is only going to backfire.
Thank you very much.
