When people with real housing needs are looking for cheap housing, the market in recent years has appeared super-luxury apartment projects costing hundreds of millions of VND/m2.
According to experts, this product line is aimed at the super-rich, so it is very picky. Therefore, investors should be alert if they intend to invest in this segment.
Shocking selling price
In the past few years, the Vietnamese real estate market has been buzzing about the emergence of a series of super-high-end apartment projects, or can be called "branded" real estate with an opening price of around $200. million VND/m2.
There are even projects with selling prices of up to 500-700 million VND/m2. Thus, to buy an apartment in these projects, buyers have to spend tens of billions of dong.
For example, in HCMC, the two projects that are said to have the most expensive asking prices are Grand Marina (estimated VND 370 million/m2) and One Central HCM (estimated VND 500 million/m2).
Both of these projects are by Masterise Group – an established business from super luxury apartment projects such as Masteri Thao Dien, Masteri An Phu, Millennium, M-One.
Other projects such as The Centennial Sai Gon, Alpha City and Alpha Town of Alpha King, at the time of market launch, were offered for sale with prices around 10,000 USD/m2.
Or like the project located on Ngo Van Nam Street (District 1), invested by Ban Viet Securities Investment Fund Management Joint Stock Company (Viet Capital Asset Management). The whole project has 36 luxury apartments spread over 9 floors with an area of about 221-301 m2, offered for sale at a price of over 10,000 USD/m2.
In Hanoi, super luxury apartments still seem to be the fear of the "big guys" when the number of projects is almost nonexistent.
Most recently, the Hanoi market has just recorded the appearance of the most expensive apartment project in the capital up to now. That is project D'. San Raffles of the investor is T&T New Age JSC.
The project developer was originally Tan Hoang Minh Group - the "tycoon" of luxury real estate, now it has been transferred to Masterise Homes - a member of Masterise Group.
Project D'. San Raffles at 22-24 Hang Bai, Hoan Kiem, Hanoi.
The project is located in the "golden land" area 22-24 Hang Bai, Hoan Kiem, Hanoi, about 100m from Sword Lake. After many years of emptying the corrugated iron sheet, it was not until February 3, 2021 that the project was officially started. The project is built into a 9-storey building with 5 basements, including a complex of commercial centers, high-class offices, and luxury apartments.
Notably, the asking price is expected to set a new price record in Hanoi market, about 570 million VND/m2.
Talking about the reason for the difference in the number of super luxury projects between Hanoi and Ho Chi Minh City, some real estate experts said that the economic scale of Ho Chi Minh City is still much larger than that of Hanoi. Therefore, the super-rich are also concentrated here, the number of customers accessing this product line in Ho Chi Minh City is accordingly more.
The data reported by the Real Estate Brokers Association, Savills or JLL all show that the absorption rate of apartment projects in Ho Chi Minh City has always remained at a very high level, above 85%. Even Grade A apartments, priced from 60-80 million VND/m2, the absorption rate is approximately 75-80%.
Meanwhile, in Hanoi, only affordable and low-priced apartments have an absorption rate of over 80%, while Grade A apartment projects remain low, only about 25-30%. In particular, the price of Grade A apartments in Hanoi is about 15-20% cheaper than in Ho Chi Minh City.
Is it "expensive in pieces"?
Mr. Le Hoang Chau, Chairman of HoREA, said that there are currently two product lines in the luxury real estate market.
One is a genuine product developed by a reputable real estate company with a global brand name, and developed and sold products.
The second is the product of the cooperation between a famous global real estate management brand and a project development enterprise, governed by a contract signed by the two parties.
However, there are some questions asked by Mr. Chau: is the product value commensurate with the amount of tens of billions of dong customers spend to buy or not? And how is the operation management and supply of branded services paid?
Mr. Chau said that usually, investors of luxury real estate projects are willing to spend heavily on product promotion and implement the "drip" method of selling goods, subdividing the "basket" to create scarcity. Rare and stimulating customer psychology is one of the first few people to own the project's branded real estate.
In terms of business, in order to use the name of "branded real estate", the project investor must pay a considerable cost to the brand management unit. This cost is certainly included in the sale price of the home that the home buyer has to pay.
When buying luxury real estate formed in the future, customers have put their trust in the product's class as well as in the reputation of the global brand owner and the reputation of the project investor.
Besides, buying and subleasing branded real estate is not easy, because this is a very picky product line.
Therefore, according to Mr. Chau, luxury real estate is not a "playground" for novice investors.
HoREA leaders warn customers and investors need to carefully study the information of the branded real estate project and especially study the contract content carefully to avoid confusion and exchange of concepts.
Assoc.Prof.Dr Dinh Trong Thinh also said that super-high-end real estate products and luxury real estate have been on the market for a long time, but there are no specific regulations on this product line.
However, one thing is for sure, this type is only for some very wealthy people with good financial potential.
“This segment is very picky and demanding in terms of technical quality. Moreover, investing in this segment also has certain risks. It is a relatively long construction period, large capital, very few actual buyers, so investors must be careful, alert, invest at a moderate level lest they cannot sell, "said Thinh.
Forecasting the potential of luxury real estate in the future, Ms. Do Thi Thu Hang, Senior Director, Research and Consulting Department of Savills Hanoi, said that it is very likely that Hanoi will appear projects. Super luxury project in the central area. It's a branded home with an expected price tag that is said to be the highest ever in this market.
In order to make the price go up to such a level, the project needs to consider the location, the quality of the finishing, and other conditions such as the brand name and operation management. And so, the evaluated position factor must be unique.
Brand management with the right level and level of perfection must be really different and pioneering. Prices also depend on different market conditions and reactions.
“The high-end category in Hanoi is in limited supply, we see that sales activities will be directed to a very narrow customer base. The product itself also needs to be considered in terms of its ability to meet the requirements of this fastidious customer or not, in order to evaluate the success of the projects," said Ms. Hang.