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Home price in HCM is in the ‘tops’ for 5 years

Savills Vietnam has just announced housing price indexes and office indexes in Hanoi and Ho Chi Minh City.

According to the report of Savills, in the second quarter of 2018, in HCMC. HCM, housing price index reached the highest in five years, equivalent to 96 points, up 1 point on quarter and 3 points per year.

Total volume increased sharply, approximately 14,400 units, up 6% quarterly and 22% year on year. The absorption rate reached the highest level in 5 years, reaching 56%, up 9 percentage points quarterly and 24 percentage points year on year.

The performance was improved thanks to the increase in transaction volume from new projects of Grade B and C. In particular, Grade B transactions saw the highest increase, equivalent to 31% per year.

Home price in HCM is in the 'tops' for 5 years
Home price in HCM is in the ‘tops’ for 5 years

“By 2020, Grade C is expected to account for 62% of total future supply. Due to the high demand for Grade C apartments, especially in the western and suburban districts, developers will focus on developing more apartments in this area, “Savills said.

In Hanoi, in the second quarter of 2018, the housing price index rose less than 1 point on a quarterly basis and fell by one point year to reach 104.81. Average selling price was US $ 1,196 / sqm, up 1% quarter-on-quarter.

Average absorption was 27% with about 7,500 units sold, up 31% quarter-on-quarter and 11% year-on-year. Grade B dominates with 59% of market share or absorption rate of 27%, while Grade C works well with 36% of units sold. The transaction volume of Grade A apartments decreased due to limited availability of supply and high asking prices.

In the second half of 2018, 20 projects will supply more than 14,300 to re, mostly in Grade B and C. The Long Bien district leads with 19% market share. The West with 36% market share will continue to be the hot spot for housing.

About office index, in Ho Chi Minh City, office index continuously increased since the second quarter of 2013. In the second quarter of 2018, the office index hit a new high of 95 points, up 2 points on a quarterly basis and 6 points on a yearly basis.

Office index in the CBD increased more than in the CBD due to higher rents, at 3% quarterly.

In the second quarter of 2018, the CBD was 99 points, up 3 points on a quarterly basis and 9 points on a yearly basis. With lower rental growth rates, about 1% quarterly, non-core office area indexes were 101 points, up 1 point on a quarterly basis and 6 points on a yearly basis.

The demand for office continues to increase while the supply is limited, the central office index is expected to surpass the non-CBD index in the future.

In the second quarter of 2018, total citywide office space sales were 36,100 square meters, down 39% quarter on quarter but up 42% year on year. Consumption increased mainly thanks to new projects with good rental capacity

In Hanoi, in the second quarter of 2018, the office index was 68.4, up 1.2 points quarter-on-quarter and 3.2 points year-on-year, mainly due to rising 2.4% quarterly rents and 4.3% By year.

Central Bureau (CBD) CBDs rose 0.4 points quarter-on-quarter and 3.2 points year-on-year due to a slight drop in capacity by -0.4 percentage points quarter-on-quarter.

With rising rents for off-center projects, office index rose 1.6 points quarter-on-quarter and 4.9 points a year despite a -0.7 percentage point drop in capacity year-on-year.

Given the current tight supply, the CBD area is expected to continue to record rising rents, and two new projects will be operational in 2019. The center will offer more options to the tenants, while maintaining competition among projects in the region.

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Home price in HCM is in the ‘tops’ for 5 years
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