Trick to increase apartment prices by 20% in Ho Chi Minh City

With a tight budget, only a few hundred million VND in capital but a desire to have a house to settle down in, Mr. Vinh paid a deposit to buy an apartment specializing in the one billion VND house segment, which was widely offered for sale on An Duong Vuong Street, District 1.

This customer confided that he was offered a price by a broker for an apartment of 61 m2, two bedrooms, two toilets, about 1.1 billion VND.

The opening ceremony took place in early October, attracting hundreds of customers, most of whom had paid tens of millions of dong to reserve their seats and chosen the most affordable apartment for themselves.

“I had to choose another smaller apartment, on a lower floor than before, with only one toilet, one main bedroom with an open bedroom, priced at 1.25 billion VND.

Not everyone is as determined to buy as much as Mr. Vinh.

Mr. Thai and his wife, who also participated in this opening ceremony, had to leave empty-handed because the price of the apartment they chose increased from 1.15 billion VND to 1.5 billion VND.

Many real estate investors in Ho Chi Minh City are applying the strategy of launching 2 selling prices, the first price is expected and the second price at the official opening time but differs by 15-20%, making apartment buyers frustrated.

Also in the beginning of the fourth quarter of 2017, a project announced by a foreign investment fund in District 9, East Saigon also had many price brackets appear before the opening date.

However, within just a few weeks after the floors pushed the initial phase of offering information, the most popular price of each apartment in this project was adjusted to VND 1.43 billion for small, high-rise areas.

Many customers who were initially eager to buy after learning that the official price was 10-20% higher than expected withdrew their reservations and abandoned the idea of ​​depositing.

General Director of an investment consulting company with experience in researching the real estate market in Ho Chi Minh City for more than a decade said that in the past 6 months, the price level of apartments in newly opened projects for sale in Saigon is increasing.

Initially, the selling price information from the investor spread to the brokerage community was quite `soft`, affordable, and was often implicitly understood as the expected price.

According to this expert’s observation, in the last 2 quarters, the official selling price is often about 10% higher than the expected price. In particular, there are projects that attract the attention and bookings of many people and even investors.

This general director analyzed the reason why the investor applied a 2-price policy (expected price and official price) to probe the market reaction.

If the expected price is determined to be `soft` and affordable, the market responds with a large number of reservations, the investor can push the price slightly higher to improve profit margins.

On the one hand, confirming the 2-price policy brings many positive interactions, helping sellers and buyers understand the needs of both parties, thereby balancing supply and demand of goods in the market.

Firstly, a price increase can make customers disappointed and have to change their financial plans too much than expected, leading to buyers losing confidence in the honesty of brokers and investors.

This expert said that the two-price policy can be effective if the initial price and the official price are not significantly different, with a margin of 3-5% being reasonable.

“Increasing selling prices is an art.