## Real Estate Price Drops by Billions but Remains Stagnant
Real Estate Price Reductions Fail to Spur Sales
Agribank’s Trang An branch recently announced the auction of two villas in Ciputra Urban Area, owned by Mr. Chu Van An (born in 1975). The villas have areas of 607m2 and 184m2, respectively, and serve as collateral for loans taken by several companies.
In this auction, Agribank has reduced the starting price by nearly VND 29 billion compared to the previous auction in August. Specifically, the first villa’s starting price is now VND 184.5 billion, a reduction of nearly VND 20 billion. The second villa has a starting price of VND 83.5 billion, a decrease of VND 9 billion.
Previously, Agribank Dong Da branch also attempted to sell, nearly ten times, the mortgaged assets of Ben Du Thuyen Hotel Joint Stock Company. These assets included thousands of square meters of land in Nha Trang, consisting of 690 apartments, penthouse gardens, basements, and commercial floors. All these assets are future formations, and the starting price has been reduced by VND 200 billion compared to the September 2023 auction.
Sacombank has also announced the sale of several real estate properties from the Xi Grand Court project, located at 256-258 Ly Thuong Kiet, Ward 14, District 10, Ho Chi Minh City. The starting prices of the ten penthouses and nine central apartments have been reduced by up to VND 2 billion compared to the first auction.
BIDV Binh Tan branch has offered for sale multiple land lots in Dong Nai, Ba Ria-Vung Tau, and Ho Chi Minh City, with prices ranging from several billion dong. According to BIDV, two land lots in Ho Chi Minh City have been auctioned eleven times without finding a buyer.
Why Are Deeply Discounted Real Estate Properties Still Hard to Sell?
In the past period, banks have been rushing to sell vacation properties, hotels, and large land lots. Many of these properties remain unsold despite significant price reductions.
According to Dr. Nguyen Tri Hieu, an economic expert, the recent difficulties in the real estate market have made it challenging for banks to liquidate mortgaged assets. He foresees this trend continuing in the coming months, as he does not anticipate any positive signals in the real estate market until the end of the year.
The Vietnam Real Estate Brokers Association (VARs) estimates that the total value of real estate mortgaged at banks accounts for about 70% of the total assets securing loans. In many banks, this ratio is as high as 80-90% and is several times larger than the total loan balance. Therefore, real estate is often the first asset that financial institutions try to auction off when borrowers default on their loans for various reasons.
To address non-performing loans, banks are publishing increasingly long lists of real estate collateral for their customers’ loans, worth tens of thousands of billions of dong. However, these properties are not selling, prolonging the resolution of these debts.
VARs attributes this stagnation to the overheated real estate market in previous years, with prices in some areas increasing severalfold between 2018 and 2022. Additionally, the auction price is based on the total debt (principal plus interest) rather than the property’s market value, making these assets less attractive to potential buyers. Some assets are also subject to time constraints and limited price reduction potential.
VARs hopes that the liquidation of mortgaged real estate will improve alongside the market’s positive recovery.
Why Did Thanh Oai District, Hanoi, Suddenly Halt the Land Auction and Refund Deposits?
The authorities of Thanh Oai District, Hanoi, have halted the auction of 57 land-use rights in Dam, Muc Xa Village, Cao Duong Commune. The district plans to return the money customers spent on application documents and deposits, citing the need to re-evaluate the starting price.
Luxurious villas for sale at unbeatable prices – Big 4 magnates offer stunning villas starting at just over 2 billion VND
A major bank has announced the auction of a series of villas in the Fishery Hill Villa Area (Quang Ninh city) with a starting price of just over 2 billion VND.
