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VN property market still recovering

Update: October, 03/2015 - 10:19
HA NOI/HCM CITY  (VNS) — Viet Nam's economic recovery in the third quarter and the amended laws on Housing and Real Estate Trading have facilitated the recovery of the country's real estate markets.

This recovery was especially evident in Ha Noi, the CB Richard Ellis Viet Nam Co Ltd (CBRE Viet Nam) said here early this week at a press conference to release its third quarter review of Ha Noi's property market.

The company said Viet Nam's economy continued to show signs of recovery in the third quarter of this year due to growth in production. The nation also showed further integration with the rest of the world through several important agreements.

A long-awaited and unprecedented change to Viet Nam's foreign ownership regulations, which came into force on July 1, 2015, had revived the country's flagging investment outlook.

"The relaxation of foreign ownership restrictions is more significant than previously anticipated and marks a strong step towards the opening up of Viet Nam's real estate market to overseas investment," Marc Townsend, CBRE Viet Nam's Managing Director, said.

These positive factors created advantages for the real estate markets nationwide during the third quarter.

In Ha Noi, a total of 9,160 new units were launched by 26 projects, doubling the figure from the same period last year, Nguyen Hoai An, CBRE Viet Nam's Associate Director, said.

High-end apartments continued to account for a larger share of the new launch stock. For the first nine months of the year, the supply of high-end apartments accounted for 25 per cent of the total new supply, up from 20 per cent in the first half of the year, including about 2,900 high-end units were launched in the third quarter alone.

Overall, positive market sentiment remained in this quarter, spurring cash inflow from buyers. An estimated 6,880 units were sold during the quarter, up by 154 per cent compared with the third quarter of 2014.

In terms of pricing, new projects under construction were seeing sharper price increases than previously completed projects. The primary price was on the rise in most segments, especially for high-end and luxury projects, increasing by an average of 5-7 per cent year-on-year.

"Three months from the date the new regulations came into effect, initial interest from foreign buyers was recorded," An said.

"There hasn't been any particular jump in sales to foreigners as more guidance is still needed for implementation. Professionalism, language proficiency and ease of payment are key issues when foreign buyers are involved."

When buying a home in Viet Nam, foreign buyers placed importance on the quality of the property and on reasonable selling prices, An said. They also considered whether the property matches their requirements for living in or leasing it.

Foreign customers often focused on high-end apartments and resorts in Viet Nam to gain the advantage of leasing these property products, she said.

HCM City market

Meanwhile, in HCM City, a total of 10,114 new units were launched in 26 projects, triple the number seen a year earlier, according to CBRE Viet Nam.

Duong Thuy Dung, research and consulting director at CBRE Viet Nam, said new supply in the south of the city, comprising districts 4, 7, 8 and Nha Be, accounted for 36 per cent of the total, while the recent hot spot in the east (districts 2, 9, Binh Thanh, and Thu Duc) accounted for 29 per cent.

"The market is believed to witness more competition between these two hot zones, the south and the east, in the coming time, especially in the context that now the Thu Thiem New Urban Area is in the east," Dung said.

The review quarter also witnessed a repackaging of some long-delayed projects where new developers took over and revitalised developments by providing more finance or redesigning unit layout, size and mix.

Overall, the market sentiment remains relatively positive despite the "ghost month," with good cash inflows. An estimated 7,862 units were sold during the quarter, up 88 per cent year-on-year.

Continuing the trend from last quarter, high-end apartments still accounted for an increasing share of units sold. In the first nine months of 2015, high-end apartment sales accounted for 35 per cent, up from the 32 per cent reported last year.

The primary price in Vietnamese dong was on the rise in most segments, especially in high-end projects, by an average of 5.5 per cent y-o-y. — VNS

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