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Luxury Apartments Will Increase Prices In 2017

2016 ended with a vibrant fourth quarter with 9,452 units sold in 28 projects in Ho Chi Minh City. However, a total of 37,419 new apartments opened for sale in 2016, down 10% from 2015.

On April 4, CBRE Vietnam Co., Ltd announced the real estate market in HCMC in the fourth quarter of 2016 and the property market in HCMC in 2017.

Accordingly, the fourth quarter of 2016 full of excitement when the transaction volume increased sharply. Ho Chi Minh City has recorded 9,452 units sold at 28, including 18 new projects. The total number of new apartments opened in 2016 is 37,419, down 10% from 2015.

CBRE said that the real estate market in Ho Chi Minh City is self-adjusting to reach the equilibrium, welcoming a larger proportion in the middle segment. For example, in mid-2015, mid-end apartments will account for 40%, and by 2016 will increase to 48%. Meanwhile, in the high-end segment of the market gradually reduced. In 2016, luxury apartments accounted for 30% and in the previous year was 38%.

The market is expanding east and south. The East has crossed the South to become the focus thanks to the improvement of infrastructure including: Metro Line 1 is coming to completion, Hanoi Highway expansion, Ho Chi Minh City-Long Thanh – Dau Giay Expressway, Long Thanh airport project …

luxury apartment
In the fourth quarter of 2016, there are 9,945 apartments available for sale at 28

According to CBRE, in the last quarter of 2016, the number of apartments successfully traded was 11,914 units, an increase of 52% compared to the third quarter and 11% over the same period in 2015. Both 2016 recorded a total of 35,008 apartments sold out, down 4% from 2015.

The number of units sold is approximately equal to the number of units offered mainly from new projects. The average apartment segment continued to grow well with over 15,270 units sold throughout the year, accounting for more than 40% of total units sold.

Average sales price in 2016 reached $ 2,104 / sqm, up 4.6% over the previous year. Price improvement is recognized in all segments, but mid-end segment housing remains dominant.

Duong Thuy Dung, Research Director of CBRE Vietnam, said that in the year 2017, 43,861 units are expected to be sold to the market. Among them, 1,627 luxury apartments from 6 projects in the center of Ho Chi Minh City, are expected to have new highlights. The high-end segment will still account for a large proportion of the more than 13,000 units sold.

In particular, the market in 2017 is expected to focus more on the market share of affordable housing and nearly 40% of all new apartments offered for sale in the popular segment. Large developers will also implement their project adjustment strategy to match the new market situation.

luxury apartment
By 2015, mid-end apartments will account for 40% and 2016 respectively.

In the period from now to 2019, the absorption rate of the affordable housing segment is expected to reach over 60%. For the high-end segment, a large number of new apartments offered and the tightened capital mobilization laws may be factors that will reduce the selling momentum. The luxury segment still maintains about 50% absorption.

In terms of price, the luxury segment is expected to grow by about 7% in 2017 with many specially designed projects in the suburban area. In addition, a residential segment is expected to increase prices by about 3%.

The premium segment is forecast to increase by about 4%. In the next three years, housing prices in HCM City are forecast to increase by nearly 10% thanks to the expansion of transport infrastructure and closed construction.

CBRE Vietnam said that in the segment of townhouses, retail space, offices for lease continued to grow well due to limited supply and high demand.

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