Realty unsalable, trading floors shutting down in masses

Real estate trading floors, which once mushroomed in the golden age, now have to shut down in masses because of the lackluster real estate market.

A series of real estate trading floors shut down

The real estate has been decreasing sharply in all areas of Hanoi. Nam An Khanh, Trung Van or Van Canh areas have seen the prices down by 20-25 percent. As a result, the busy real estate trading floors, which had been prosperous for the last many years, have to shut down and lay off workers.

Le Van Luong Road, called the “paradise of real estate brokers”, once gathered 50 real estate trading floors or brokerage offices. However, the number has halved recently.

Nguyen Tien Dung, Director of the Van Phuc real estate trading floor located on Le Van Luong road, said that just several months ago, there were about 10 trading floors around Van Phuc. However, there are only four operational trading floors.

Dung said that the other trading floors have “died”, while the four ones still can survive because they have good capital and a high enough number of loyal customers who offer to sell or buy real estate through the floors.

He went on to say that if trading floors continue relying on drop-in customers, they would not be able to survive.

“Earlier this year, we still had to compete with tens of real estate trading floors, which appeared just on a short stretch of road of less than one kilometer,” said the owner of a real estate trading floor in Duong Noi area said.

“However, as the real estate market has been falling, no one wants to make purchases or sales at this moment, the “new comers” have left the market, because they could not afford the high workshop premises, pay to workers and other expenses, worth up to tens of millions of dong a month,” he added.

However, the current economic difficulties prove to spare no one: even the trading floors, which still can survive, are also facing big difficulties. Since the number of clients decreases dramatically, the income from brokerage services has been decreasing steadily, which means lower income for real estate trading floors to earn their living.

The owner of a real estate brokerage office said that most of the products available on the trading floors are high end apartments, villas or expensive products, worth no less than three billion dong, which prove to be unsalable in the current economic difficulties. Therefore, real estate trading floors’ officers themselves have to seek the products suitable to buyers. The apartments worth less than 1.5 billion dong and the residential land worth less than two billion dong are the best sellers now.

The officer of the Phu Thinh trading floor said that in the past, every client, who wanted to get information about houses and land for sale, had to pay 500,000-1 million dong. However, since there are too few clients, the fee has been exempted at many brokerage offices.

Previously, buyers and sellers had to pay the brokerage fees of two percent, in case transactions were successful. However, the two percent fee mechanism has not been applied any more, while the fee would be negotiated by the involved parties.

The rich also tighten their belt

The lackluster real estate market has not only badly affected domestic small real estate brokers, but also foreign real estate service providers. As real estate developers have been trying to cut down marketing and project management fees, the foreign real estate service providers do not have many jobs to take any longer.

It is now a growing tendency that domestic real estate developers hire domestic marketing experts instead of foreign ones.

The investor of an Indochina project said that in the current circumstances, it would be better to use domestic marketing experts not only because this would be less costly. “Since the market remains lackluster, distributors need to have good relations and deep knowledge in Vietnamese consumption culture. Meanwhile, these are the advantages of domestic distributors,” he said.

Hung Gia Viet Company has obtained the contract on acting as the exclusive distributor of the products of PetroVietnam Green House, while Dat Ngoc has got the contract on distributing Green Hills Apartment.

From VietNamBusiness

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