Apartment transaction volume in Ho Chi Minh city has reached peak in the last six years

Savill Real estate consulting company  has just released a report on the real estate market in the second quarter in HCMC. Accordingly, the apartment segment has been recorded unexpected movements.

According to Savills’s reports, in the second quarter of 2004, four new projects and the next phase of seven existing projects were opened for sale, providing more than 4,700 units. Total primary supply of apartments reached more than 37,200 units, down 12% quarterly and 7% yearly.

Despite of declining supply, transaction number in the market increased sharply up 33% quarter on quarter and 67% year on year. As a result, nearly 11,600 units had been sold, trading volume of the second quarter of 2017 has reached its peak since 2011 up to now.

The impressive performance of Grade B and Grade C apartments has made the market’s consumption rate increase by 10 percentage points quarterly  and 13 percentage points to 31% yearly. Class C has the highest absorption rate of about 37% and accounts for 64% of total transaction volume.

Assessing on future supply, Savills said that from third quarter of 2017 to 2018, nearly 48,000 units are expected to enter the apartment market. Grade C apartment is expected to occupy the future supply with nearly 46% of market share.

For service apartments, three Grade C projects in District 3 and one project  in Tan Binh district have provided  121 additional apartments. Total supply of apartments reached 4,800 units, up 3% quarterly and 4% yearly.

Average consumption capacity increased by 5 percentage points year-on-year but down 2 percentage points quarter-on-quarter, reached 85%. Many vacant apartments in Grade A and Grade C apartments are the main causes for capacity decrease. Average rental rate is stable quarterly, but increased by 2% yearly.

According to Savills’s report, from the third quarter to 2019, the service apartment market will increase 1,900 units in the center area, accounting for 52% of the total future supply. The last half of 2017 will receive a big race with new supply mainly from Grade A and Grade B.

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