Property fever continues to sweep HCMC

The New Year’s housing market in Ho Chi Minh City was off to a strong start Monday as around 3,000 prospective buyers scrambled to Nha Be District register for units in a new apartment block.

At around 8 a.m., Thanh Nien witnessed throngs of prospective buyers lining Nguyen Huu Tho Street to register for 580 apartment blocks to be built in District 2 by the HAGL Land Company.

Though registration is scheduled to last until Saturday, droves of buyers have already signed up.

HAGL Land said its staff was working overtime to handle the massive crowds.

One prospective buyer, Nguu Ngoc Bich, told Thanh Nien that she hoped to buy an apartment since she was convinced she could make a huge profit by reselling it.

Le Hung, HAGL Land’s director, said prospective buyers would be selected to draw lots next May to decide who would be eligible to purchase an apartment.

To participate in the lot-drawing portion, buyers are asked to open a bank account worth at least 30 percent of the apartment price, Hung said, meaning buyers must have at least VND1.6 billion (US$100,000) to draw lots for a 150 square meter apartment.

But such harsh requirements did little to dissuade people from flocking to register with the number of prospective buyers expected to reach around 5,000 when registration wraps up on Saturday.

Hung also revealed that HAGL Land had opened the current registration in a bid to sound out the property market in HCMC to adopt workable business strategies for the year ahead.

The firm also said it was set to roll out around 1,500 apartments this year.

The property scramble is expected to remain overheated in HCMC this year as the prices of many apartments have continued to surge.

From October to November last year, at least three property frenzies were reported in HCMC as prospective buyers rushed to deposit money for apartments built by Capitaland-Vista, Phu My Hung, and Van Phat Hung companies.

The HCMC government then ruled that these firms had “mobilized customers’ capital” – collecting deposits from prospective buyers – even before finishing the foundation of proposed apartment blocks.

The trio thus violated Vietnam’s housing laws and had to return the money to the buyers.

Major factors

Le Hoang Chau, vice chairman of the HCMC Real Estate Association, attributed the city’s ongoing property fever to three major factors.

First, HCMC’s strict ruling that companies cannot accept deposits from prospective buyers means that more people may flock to register for housing units.

Second, the government is set to amend its foreign housing policy meaning that foreigners will soon be allowed to buy houses in Vietnam.

Many speculators are stepping in to buy apartments, hoping to resell them to foreigners and rake in huge profits.

Finally, Chau attributed the galloping price hike of construction materials to the property frenzy.