Residential Property Market: Real Buyers look for Real Value

Transcription

1 Residential Property Market: Real Buyers look for Real Value Presented by Mr. Thai Nguyen Nguyen Associate Director, Residential Project Marketing 16 th April 2009

2 Stock Market Rising - 30 Day Trend Graph from VNDirect CB Richard Ellis Page 2

3 Overview of 30 Day Trends 1. Fewer local white-collar lay-offs 2. Stock Market picking up cautiously 3. Vietnam does not have pension/provident fund only Cash, Gold & Land 4. Little debt with savings in hand 5. Prices coming off in both primary and secondary markets 6. Job hopping is back as expatriates are replaced 7. Real buyers have cash CB Richard Ellis Page 3

4 Construction Activity Begins to Move in HCMC New wave of construction at Residential Condo Sites District Districts 1 & 3 District 2 District 7 District 4 Districts 10 & 11 Go Vap Binh Thanh Projects Ben Thanh Tower, M&C Tower, Golden Hill, Saigon Mansion The Vista, Estella, Blooming Park, Xi Riverview Palace, An Khang, Petro Vietnam Landmark, HA Riverview, River Garden, Preche Riverside Residences, Sunrise City, Sky Garden 3, An Vien H2, Orient The Everich, The Flemington, Lu Gia, Xi Grand Court Splendor The Manor, Saigon Pearl CB Richard Ellis Page 4 Total Number of Units (Overall) = 10,779

5 District 1 & 3 HCMC Center Saigon Mansion Golden Hill M&C Tower Ben Thanh Tower CB Richard Ellis Page 5

6 District 2 the HOT spot The Vista Preche River Garden XI Riverview Palace Estella Hoang Anh Riverview CB Richard Ellis Page 6

7 District 11 Park Life in the City The Flemington XI Grand Court CB Richard Ellis Page 7 Lu Gia The Everich

8 District 7 Saigon South Riverside Residence Sky Garden 3 Sunrise City CB Richard Ellis Page 8

9 Projects are Selling - New Launches/Re-launches Q RIVERSIDE RESIDENCES- PMH D7 PHU HOANG ANH-HAGL Saigon South BECAMEX CITY CENTER (BD) ECOLAKES MY PHUOC (BD) SKY CITY TOWERS (HN) CB Richard Ellis Page 9 More on the way. HOANG ANH RIVERVIEW D2

10 Hanoi is moving too District Ba Dinh Cau Giay Dong Da Ha Dong Hai Ba Trung Hoai Duc Hoang Mai Long Bien Tay Ho Thanh Xuan Tu Liem Projects Hanoi City Complex, Doi Can Condo Thang Long Int'l Village Complex, N05, N04 Thanh Cong 2, Mipec Tower, Kim Lien Condo NCG Residentials, Hattoco Complex 201 Minh Khai, Le Dai Hanh Complex Tricon Tower Lilama Complex, Song Da, Nguyen Tam Trinh Telin Condo Golden Westlake Nguyen Trai - Thanh Xuan Complex Keangnam, My Dinh Apartment Towers, Intracom, Hoang Quoc Viet Residentials Total Number of Units (Overall) = 13,220 CB Richard Ellis Page 10

11 People are Buying Primary & Secondary Primary Market the market in which buyers have the first opportunity to purchase a newly issued residential unit directly from the developer s sales team or its agent Secondary Market the market where a buyer purchases a residential unit from another buyer rather than the issuing organization (developer) typically done by a broker, an agent, and FSBO, utilizing information from the internet (real estate websites) Deals Price & Terms Financial Support Developer Commitment CB Richard Ellis Page 11

12 What are real buyers looking for? Deals Discounted price from the peaks of Jan 2008 More promotion Price & Terms Original or affordable price Difference between the primary and secondary market prices Better payment terms longer and more flexible Financial Support Loan support from Developers and Banks CB Richard Ellis Page 12

13 What are real buyers looking for? Reliable Developers who Care Customers must have faith and belief in the Developer when buying A commitment from Developers for the on-time completion and handover Flexible and comfortable designs affordable sizes Better service from the Developers support resale transactions Completed foundations at the time of sales with monthly updates on construction a show of consistent on-site activity Clearly defined fees such as service, management, parking, etc. Track record Show-flats on-site and a well-trained Marketing Team CB Richard Ellis Page 13

14 The Market - how big is it? 2009F ,000 Total Completed Units (2008) = 19,578 First time buyers Up Graders Investors Viet Kieu Foreigners based in Vietnam CB Richard Ellis Page F ,500 Estimated Population Growth 2011F , F ,000 HCMC Average Growth Rate 3.1% pa Assume 5% Buyers Estimated Future Supply of Completed Condominiums pa 2009F 16, F 21, F 22, F 24,500 Status All Planned Projects

15 Current Buyer Profile Market begins to separate into 2 different segments Group 1 High-end Buyers (emotional/social benefits) Concerned with: brand / image, design, material, car park, retail & recreation area, capital value, liquidity, amenities Group 2 Price Sensitive Buyers (functional benefits) Concerned with: asking price, unit size (as it relates to overall price of unit as well as function), basic facilities, living areas, and finance package Common Concerns: timing delivery vs. payment, payment terms, loan issues, ownership delivery, resale conditions & support CB Richard Ellis Page 15

16 Developers - How to reduce the risks? Widen the Sales Profile Create demand during the foundation/piling stage Branding spend early, save later More use of Marketing Companies Greater allocation of marketing budget Build to the Market Listen to the market Control the construction progress Price Right Flexible payment and loan support Time Your Sale Expand your Distribution Networks Use the Data Analytics Database Managers Think out of the box Sell off one tower Convert one block to Serviced Apartments (or Hotel) CB Richard Ellis Page 16

17 How to widen the sales profile? Marketing to First Time Buyers & Up-Graders Promotions Offer a car to buyers on certain units Payment Terms & Overall Price Web Advertising Linking to other sites, ads on main engines Yahoo, Google, etc. TV / Cinema / Radio Ads & Editorials Web Profiling analytics by age, address, education, car ownership, etc On-site Webcam to show live site activity Typical Forms Signage, Brochures, Showroom/Units Social Networks Online - Facebook, My Space, LinkedIn, Blogs Mobile Phone Marketing CB Richard Ellis Page 17

18 Developers - What to Build? Affordable sizes High-End Buyers particular to leasability while Price-Sensitive Buyers sensitive to overall sales price Real buyers can t afford 200 sm even if it is only at US$ 1,300 Suggested sizing from 50 to 130 sm. Small is beautiful Ask the buyers; market surveys & Focus groups Villas (lot sizes) & Condos the Mix End of high end Facilities and amenities SoHo (live-work units) Ease of leasing CB Richard Ellis Page 18

19 Developers - What Price to Sell At? 1 st Benchmarking other developments 2 nd Cost Analysis Approach Final = Adjust for Market Factors Cost Analysis Approach critical in this market Analyze land prices, contractor quotes, low-interest loans (bank partners) and suitable margins Consider discounts CB Richard Ellis Page 19

20 Developers When to start Selling? First, before the guys next to you Competition analysis Timing, Terms, Price Sales strategy best / worst case scenarios Plan What are you selling? Low, middle, high Emotional appeals Timing of marketing / branding efforts CB Richard Ellis Page 20

21 Sales Distribution Network Brokers vs. Agents An Agent is employed by a Developer directly and is therefore directly accountable to the Developer and the Buyer (an extension of the Developer) A Broker sells products from anyone to anyone accountable only to himself mass market Models of Distribution Brokers and Agents offer greater benefits to both end buyer and Developers The Developer community has not learned the benefits of Brokers & Agents CB Richard Ellis Page 21

22 Web Analytics On-line Data gives you real numbers Interaction with potential buyers Interactive numbers over millions of page views On-line marketing / Digital marketing ( soft copies e.flyers) On-line real estate advertising expected to account for 1/3 of the entire marketing budget by 2010 Real-time, statistical view into real estate market for each district and many developments Thousands of new listings added each month to the database In Vietnam, on one site alone, over 2,000 property searches a day Demographic data which has not previously been available CB Richard Ellis Page 22

23 Web Analytical Data Heat Graph Apartments for Sale: Jan Dec 2008 This heat graph shows the individual listings and the color shows the number of views. Lighter blue is fewer views, darker purple represents more views. CB Richard Ellis Page 23 Heat Graph provided by MetVuong.com

24 Other important things to consider Property management in house or outsource Usable area within the units hallways, corridors, angles Parking ratio of spaces per units, buy / lease Owners management committee make up and responsibility Resale market ease of secondary sales Security, cleaning, lifts, energy usage Green issues Reasonable management fees Infrastructure and flooding CB Richard Ellis Page 24

25 Current status of major infrastructure developments in HCMC District 7 (Phu My Hung) District 2 (Cat Lai port area) Phu My bridge to be completed early September 2009 Khanh Hoi bridge connecting District 1 & 4 Calmette bridge District 1 Ben Nghe Canal District 4 Located next to M&C Site Completed in late January 2009 Completed late January 2009 CB Richard Ellis Page 25

26 Current status of major infrastructure developments in HCMC District 1 Thu Thiem tunnel Thu Thiem area District 2 East West Highway Calmette bridge East - West highway to be completed Q1 10 CB Richard Ellis Page 26

27 Market Analysis Why Q re/launches were successful? Developers need to rethink their approach to buyers Real Demand exists Real Buyers are out there Act now, or risk the future? Office market example Branding and Marketing are much more important than ever before Vietnamese use the internet to collect Real Estate information Professional advice can affect your bottom-line Research, Marketing, Agents/Brokers CB Richard Ellis Page 27

28 Quarterly Reports for Ho Chi Minh City and Hanoi Available for each city, in English or Vietnamese National and City Economic Overview Office Retail Hotel Residential for Sale Investment Serviced Apartments Construction Costs CB Richard Ellis Page 28

29 Over 300 markets in more than 50 countries Thank You CB Richard Ellis Page 29