5 pressures weighing on the apartment market after the Carina apartment fire 2

5 pressures weighing on the apartment market after the Carina apartment fire 2

Customers can cancel apartment purchase orders, delay payment, and low liquidity are the first pressures.

Deputy Dean of the Faculty of International Business – Marketing, Ho Chi Minh City University of Economics, Huynh Phuoc Nghia, said that the recent Carina apartment fire that killed 13 people is changing people’s consumption behavior and apartment investment behavior.

This expert pointed out difficulties for the apartment segment in particular and the entire real estate market in general at least in the next 6-12 months because of the psychological impact of fear that will cover the apartment market.

A corner of the Carina apartment complex after the fire on March 23.

Feeling bored with the apartment

For people considering buying an apartment, the Carina fire can become a psychological barrier that causes consumers to withdraw their intention to buy.

For those who have paid money to buy, payment may be delayed until questions about fire safety are satisfactorily answered.

Apartment sales must include fire safety solutions

The changing behavior of home buyers forces investors to flexibly change marketing and sales methods.

If in the past, businesses focused on promoting prime locations and soliciting hundreds of amenities and landscapes, highlighting them with vivid 3D images and high profit opportunities, now investors must commit to complying with standards.

Apartment liquidity may decline

In the short term, because the psychological shock from the fire is still spreading, the apartment market may face a decline in purchasing power and consumption.

Local oversupply pressure

The Carina apartment fire took place on March 23, which means only ten days until the end of the first quarter of 2018.

However, for the group of customers buying apartments to live in, they only need a good product that meets fire prevention standards, a reputable investor, a strong commitment to fire safety, and a solution.

The Carina fire could cause land prices to escalate

Although not many, there will be a segment of apartment investors (buying to rent, buying to increase selling prices to gain profit) starting to shift capital flows to other channels to avoid the psychological impact after the apartment fire.

The shift in investment channels from apartments to houses and land in the short term can make real estate hotter because of a sudden increase in supply.

Mr. Nghia said that in the short term, the above pressures could be a barrier causing the market to slow down.

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