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VietNamNews

Apartment sector recovery continues

Update: July, 05/2014 - 10:53
A view of apartment buildings on Tran Duy Hung Street in Ha Noi. The market in big cities such as Ha Noi and HCM City is seeing improvement. — VNA/VNS Photo Hoang Lam

HA NOI/HCM CITY (VNS)— The condominium markets in Ha Noi and HCM City continue to record positive signals on issues ranging from liquidation to selling prices in the second quarter (Q2).

Executive Director of CBRE (Viet Nam) Co., Ltd Richard Leech said that according to the company's report on Ha Noi's property market in Q2 this year, the macro economy continued to recover even though the conflicts on the East Sea between Viet Nam and China partly affected the local security, tourism, hotel, trading and investment markets.

In Q2 this year, developers continued to clear their unsold stock with active launches and marketing activities, he said. Ten out of sixteen projects with launches in the quarter promoted their stocks that had been released before, he said. In terms of sales performance, transactions increased steadily with an estimated 2,500 units sold in the quarter, an increase of 60 per cent from Q1.

While the majority of the transactions occurred across the mid- and low-end segments, the high-end segment saw a significant improvement in sales compared to Q1's performance, as developers launched aggressive promotion campaigns and market sentiment improved among buyers.

A factor for the improving sales performance this quarter was the fact that banks were more bullish in lending. Banks actively cooperated with developers to offer interest subsidy programmes with preferential interest rates being fixed for up to one year for buyers taking mortgages. Higher loan-to-value ratio and longer loan tenures were also offered to attract customers.

With credit being more accessible to buyers, the demand for purchase of homes will continue to pick up in the second half of the year.

Revival in HCM City

Improving sales and the passage of clearer regulations have encouraged developers to continue launching projects of condominium for sale, CBRE said in a report on HCM City property market.

Under the report, the second quarter saw 10 projects launched across all three segments – high-end, mid-end, and affordable – with 2,792 units, representing an increase of 135.8 per cent year-on-year.

In a change with past practice, developers, especially those without a proven track record, now launch projects only after a few floors are completed as opposed to the foundation stage earlier, a practice that assures potential buyers.

Prices too are much more reasonable than they were a year ago, with affordable projects selling at below $700 or VND15 million per square metre, the threshold to qualify for loans from the $1.4 billion (VND30 trillion) credit package.

This partly explains why primary prices in this segment have fallen to $663, representing a decrease of 2.8 per cent quarter-on-quarter and 3.6 per cent year-on-year in the second quarter.

Not only were prices more reasonable but unit sizes were also more affordable.

"The most popular size for a two-bedroom unit in the high-end segment was 100-120sq.m at projects launched before 2012 while now it is only 80-87sq.m," Duong Thuy Dung, associate director and head of research and consulting services at CBRE Viet Nam's HCM City branch, noted.

Thanks to sophisticated designs and reasonable prices combined with promotions, sales has consistently improved over the last three quarters.

Preliminary figures show that transactions increased by 9.3 per cent q-o-q and 93.9 per cent y-o-y in the second quarter. — VNS


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