Quarter 2/2017 nearly 10,000 apartments are offered for sale in the real estate market in Ho Chi Minh

In quarter 2/2017, the real estate report in Ho Chi Minh City was exciting with the number of newly offered apartments and the number of apartments sold increased.

According to the latest market report announced by CBRE Vietnam, in the quarter 2/2017 HCMC real estate market received a total of 9,580 new offering from 31 projects. Although 7% lower than the same period last year, the new offering units in Q2/2017 increased 80%. The mid-end segment continues to account for the largest share of total new supply, accounting for 56%.

However, in terms of growth, the segment grew by 141%  and will continue to increase in the second half of 2017 with many projects from developers reputation. The popular segment rose 19% over the previous year  to 1,575 units while the luxury segment continued to remain quiet and there was no new offering.

The real estate market in Ho Chi Minh City flourished in the second quarter of 2017

According to the location, the East reclaimed the leading position and was the most active sector, accounting for 36% of new supply. The West continued to record the number of units offered as high as 3,268 units accounted for 34%, mainly middle-class apartments. This represents a trend toward the west of middle-class housing developers as more and more land is available, cheaper prices and improved infrastructure. In the South, only 2,408 units were offered for sale in District 7. The North added 486 units to its total from a project in District 12.

In the second quarter, the market also recorded positive consumption. According to CBRE, total units sold were 9,522 units, up 40% quarter-on-quarter and up 59% over the same period last year. The mid-market segment continues to lead the market with 4862 units sold, accounting for 51% of total sales. New projects launched in the quarter recorded 5,765 units sold accounted for more than 60% of total consumption. Generally new projects account for about 50% of the total sales of a quarter.

Average selling price was US $ 1,578 per square meter, down 1% quarter-on-quarter and up 9% over the same period last year. Offer prices dropped slightly as the number of new projects launched in the medium and high end segments increased. Selling price improved in District 7 and District 10 from the second phase of sale of projects.

Duong Thuy Dung, CBRE’s Director of Research, added that foreign buyers have been more confident and diversified since the beginning of the year. Foreigners account for 59% of successful transactions.

Among them, Singapore, Taiwan, Korea and Hong Kong are the most active buyers. In terms of products, two- and three-bedroom apartments accounted for 38% and 37%, respectively. For the purpose of buying, the market is moving toward buyers. Residential buyers increased 9 percentage points while buyers for rentals fell 19 percentage points from the first half of 2016.

Looking at market prospects, improvements in infrastructure and macroeconomic factors continue to support the real estate market. In the second half of 2017, the premium segment will be more active. Some of the projects in prime locations such as D’Edge in Thao Dien (Q2), the second phase of Empire City (Q2), have begun taking place at the end of Q2 .

The market will pick up new, higher-end, larger and more hypermarkets. With the entry of high-end products, average market prices and foreign buyers are expected to increase in the second half of 2017.

Regarding CBRE’s CBRE segment, CBRE said that by mid-2017, while the East still dominated the market for new supply (68%), the market saw new offers coming from different regions. Including the emerging area of ​​West (Binh Tan District) with 13% of total new supply.

The North and South areas respectively account for 10% of total new supply. On the absorption capacity, 817 products were consumed, down 6% over the same period last year and down 16% over the quarter previous   , mainly due to the lack of new large-scale supply.

The East area is the leader and the most active area in Ho Chi Minh City, accounting for 36% of the new supply

On average asking prices, primary market prices increased by 15% y / y and slightly down 1.5% q / q. Due to the constraints of new supply, secondary market activity has become more active, especially for commercial townhouses and commercial buildings.

Secondary prices for recent built street houses / townhouses have seen rapid increases in District 2 and Go Vap Districts; Prices for well-positioned products may increase by up to 30% during the quarter.

Dung added that many months ago large scale projects of big investors were advertised in the previous quarters, showing no sign of preparing to start construction in the quarter. Meanwhile, many smaller-scale projects are being booked, as investors are trying to test out the market for the best price before officially launching in the next quarter. From now to the end of the year, it is anticipated that large-scale projects will be launched in various areas of the city. At the same time, the products will be more diverse in different segments.

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