A view of the HCM City skyline. The city’s real estate market is expected to rebound next year. — Photo tripsavvy.com

HCM CITY — The HCM City real estate market is expected to rebound as soon as the COVID-19 pandemic is under control and legal “bottlenecks” are removed, experts have said.

Lê Hoàng Châu, chairman of the HCM City Real Estate Association, said the market would recover from the first quarter of next year since Việt Nam has done an excellent job of containing the pandemic, which has instilled confidence in many businesses. 

Võ Thị Khánh Trang, head of market research at Savills Vietnam, said more than 50,000 square metres at seven new projects were offered for sale in the last three months, with the non-central business district area accounting for more than 80 per cent.

Positive economic factors such as strong domestic consumption and the impact of the EU-Việt Nam Free Trade Agreement (EVFTA) would drive the retail industry, and foreign retailers, especially from the EU, are expected to enter Việt Nam, increasing demand for office rental space, she said.

According to Savills, high-end condos in the city remain popular among local investors despite the pandemic and show no signs of cooling down in terms of price. 

For instance, a condo project in the Thủ Thiêm new urban area in District 2 began selling early this month at an average price of US$7,000 per square metre, but still attracted much interest from prospective buyers, it said.

More than 7,500 condos were for sale in the third quarter, 252 per cent up from the previous quarter, and more than 16,000 will hit the market in the fourth quarter.

The eastern part of the city such as districts 2, 9 and Thủ Đức District will continue to lead the new supply.

But supply of land plots decreased by 65 per cent in the third quarter ​​compared to the previous quarter. 

Only around 470 plots were sold in the third quarter, the lowest number since 2016, after 14 projects stopped selling due to legal problems. 

The land segment has in fact lost some of its sheen due to impact of the outbreak, legal problems and low credibility of developers.

The office market too is expected to face difficulties over the next few months due to the impact of the pandemic, according to a survey by CBRE Vietnam.

Phạm Ngọc Thiên Thanh, deputy director of research and consulting at CBRE, said the market would have more new supply of office space in the non-central business district area at competitive prices.

Owners of office buildings are reconciled to negotiating with tenants, she said.

In the industrial real estate segment, the key southern industrial area added four new industrial parks in the first nine months, one each in HCM City and Đồng Nai Province and two in Long An Province, with a total area of ​​more than 1,373ha, according to CBRE.

Promising market

Experienced investors would continue to invest in real estate in HCM City based on the hope that the market would recover after the pandemic, experts said.

Nguyễn Xuân Thành, a lecturer at Fulbright University Vietnam, said investors with spare cash should invest in real estate and accept lower profits at the moment.

The city property market was gloomy in the first nine months, according to Châu. 

Sử Ngọc Khương, senior director of Savills, said this is such a challenging time for local and foreign investors but a great opportunity for those who have strong financial capacity and experience. 

Despite the pandemic, the prices of properties with land in the city were up 15 per cent year-on-year in the third quarter due to a lack of new supply, according to a report by property consultancy JLL. 

Experts said Việt Nam should continue to control the pandemic to take advantage of the new wave of foreign investment in property sector, especially industrial real estate, offices for rent, houses for lease, and other service areas. — VNS