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Apartment sales expected to climb

Update: July, 04/2015 - 10:35

A block of the Phu My Hung Villas. Viet Nam's property market is expected to rise in both supply and demand in the second half of this year. — VNS Photo Viet Thanh

HA NOI (VNS) — The domestic real estate market will continue positive development in apartment sales during the second half of this year.

The segment had recorded an upward trend during the first quarter, said experts.

Continuing its recovery since the end of 2014, the local real estate market will see positive development and is expected to mark an increase in supply and demand in the second half of this year, Nguyen Ngoc Thanh, deputy chairman of Viet Nam Real Estate Association, was quoted as saying by the Thoi bao Tai chinh (Financial Times) online.

However, unlike the previous period, the market will not have fever or bubbles, according to Thanh.

The market will also see an increase in prices, especially of high-quality projects developed by reputed investors offering good connectivity, infrastructures, and services.

The amended laws on real estate trading and housing, which has come into effect in July, will support the local property market in sustainable development, the selection of healthy enterprises, as well as protection of consumer interests.

According to the second quarter report on Ha Noi property market prepared by CB Richard Ellis Viet Nam Ltd. Co. (CBRE Viet Nam), in the second quarter (Q2) of this year, the market continued to show positive signals amidst anticipation on the impact of new regulations effective from July 1, 2015.

A total of 5,137 new units were launched across 19 projects, marking a 93 per cent increase as compared to Q2 2014. High-end apartments continued to have a larger share in the newly launched units. Notably, for the first time, high-end apartments accounted for approximately one-third of the total newly launched stock (30 per cent), which had been higher than any quarters since 2012. With 1,518 units, the number of launches of high-end units tripled quarter-over-quarter.

Overall, the market's sales performance continued to be strong in this quarter. An estimated 4,480 units were sold during the quarter, up 80 per cent from that of Q2 2014. Transactions in high-end apartments also marked a notable increase.

In the first six months of 2015, high-end apartment transactions accounted for 22 per cent of total sales, as compared to 6 per cent in 2013 or 18 per cent in 2014. At the same time, the share of affordable segment, which used to dominate the market, dropped to 26 per cent in the first half of 2015, from 49 per cent in 2013 and 33 per cent in 2014.

Meanwhile, prices too saw an increase of approximately 4-6 per cent year-over-year across several projects, especially those in sought-after localities that were fairly close to central business districts or were near major infrastructures that were under construction.

Price increase had been marked mostly in high-end and affordable segments.

It was noted that progress in infrastructure development had a positive impact on the prices of projects. It is expected that good infrastructure will continue to be a catalyst for new projects and investors and developers entering the market.

In addition, as the market is on the recovery track, it is expected that more high-end and luxury projects will be introduced as developers want to exploit the current market sentiments, said CBRE Viet Nam.

Meanwhile, with new regulations in place, the market is expected to become a more transparent platform for stakeholders in the long run.

For HCM City market, the CBRE Viet Nam said, if there was any doubt because of the slightly slow start this year, the picture has become much clearer now, and one can see that the condominium market is firmly on the path to recovery.

This was proved by take-up levels – Q2 this year saw a record in historical quarterly absorption, with over 10,000 units in both new and previous launches sold. Interestingly, the majority of successful transactions have shifted from the affordable segment in 2012-13 to the high-end segment now.

The high-end segment reported record absorption in Q2 2015, with the sale of some 5,800 units, while the affordable segment saw the sale of around 2,800 units.

Improving the situation further, most high-end projects increased their asking prices for later phases/launches, edging the market-wide, high-end primary price up by 3.2 per cent quarter-over-quarter to US$1,781 per square metre.

Marc Townsend, managing director of CBRE Viet Nam, said: "With such impressive take-up, launches, and improved price levels in the first half of 2015, we can confirm that bad days are behind us." — VNS

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