Overview of HCMC real estate market 2017: Growth back in risk aversion

Final report of HoREA has shown a pretty bright picture of the city’s housing market in 2017. However, there are still “black spots” in the picture, which are likely to cause instability and risk. next time.

Growth is back

According to HoREA, from 2013 back, the real estate market in the country in general and TP. HCMC in particular showed a positive recovery. The high growth of the market is in 2015, followed by a slight decline in 2016 and a resurgence in 2017.

2017 can be considered as a successful year for the real estate market TP. HCM

2017 can be considered as a successful year for the real estate market TP. HCM

According to the General Statistics Office, 2017, the real estate market has increased by 4.07% compared to 2016, contributing 0.21% of total GDP growth.

Specifically, in the city in 2017, the city has developed 10.11 million sqm floor housing, bringing the total area of ​​the city housing to 162.25 million sqm, average 18.87 sqm per person.

Regarding projects, the whole city now has 29 large-scale housing projects with total investment of nearly VND158 trillion. Of which, there are two projects of over 50 hectares and 27 projects with total investment of over VND 3,000 billion or over 1,500 apartments / houses.

In addition, the city also completed construction of 5 social housing projects with 3,704 apartments; urging investors to accelerate the construction of 12 other social housing projects with 7,336 units.

District People’s Committees have also completed the classification and accreditation of all 474 older buildings. Accordingly, there are 14 class D apartments (bad damage, dangerous); 115 apartment buildings; 328 B grade apartments and 11 apartments do not need to be inspected due to relocation or change of use purpose.

Nearly 100 real estate businesses have registered to rebuild old apartment buildings and relocate, relocate and relocate households living in and around the canals of the city.

The city has 29 large-scale housing projects with a total investment of nearly VND158 trillion

The city has 29 large-scale housing projects with a total investment of nearly VND158 trillion

About the housing market formed in the future, in 2017, the city has 92 projects with a total of 42,991 houses (37,502 apartments, 5,489 low-rise buildings) are qualified by the Department of Construction capital. The total value of capital mobilization is VND 86,421 billion.

According to HoREA, the number of projects in the future is more concentrated in the east (district 2, district 9, Thu Duc), south (district 7, Nha Be, district 8, Binh Tan).

The high-end segment has 10,987 units, accounting for 25.5% (an increase of 3,747 units, a 22.9% increase compared to 2016); Mid-range segment has 19,509 units, accounting for 45.5% (up 1,081 units, increasing 16.4% compared to 2016); The average segment is 12,495 units, accounting for 29.1% (increasing 5,026 units, increasing 67.3% compared to 2016).

Thus, the proportion of affordable apartments (medium and low cost) still accounts for the largest share (74% of total apartments launched in 2017 similar to 2016).

However, the average apartment of 12,495 units (accounting for 29.1%) has not met the great demand of officials, public servants, armed forces, workers low-income urban residents and immigrants.

Office for rent, commercial real estate well developed

HoREA said 2017 could be considered as a successful year for the office rental market as the occupancy rate is quite high; For Class A offices, the occupancy rate is over 90%.

In the third quarter of 2017, the supply was only about 26,000 sqm of office class A; no more Class B office supply; Class A office rents average $ 36.7 / sqm / month; Class B is about $ 20.7 / sqm/ month.

For the commercial real estate market (including trade centers, supermarkets, convenience stores) HoREA commented that the market thrives with many famous Vietnamese brands such as Co.op Mart, VinMart, Satra Mart, and has many international brands such as Aeon, Central, Auchan Super – Simply Mart, Family Mart, Seven Eleven, E Mart.

The negative point is that the development of e-commerce, online business and the world’s major brands continue to Vietnam has a strong impact on the business enterprises in the country. At the same time, with many apartment projects with medium commercial scale (only a few hundred to several thousand sqm floor), many investors are having difficulty finding partners to exploit. , business.

Disturbance from condotel, land plots, apartment disputes

According to HoREA, the hotel, serviced apartment, condotel, hometel, villas in the tourist market have been developing very well over the past years. There are signs of over supply.

“The proportion of condotel apartments now stands at 56%, higher than the hotel room supply, which accounts for 44% of total supply is unusual, as in general condotel supply is lower than the hotel room and resort supply.

“The owner committed to profit up to 8 – 12% per year for 8-12 years but no measures to ensure the investor to comply with the commitment should have potential risk to investors secondary, “the association commented.

According to HoREA, the virtual land price fever in the first months of 2017 in some coastal districts and suburbs has been cooled down in time due to the dire measures of the city. However, due to scarcity of supply, land price fever is showing signs of returning in the coastal areas such as District 9, Thu Duc, Binh Tan District, District 12, Hoc Mon, Binh Chanh, Nha Be.

Meanwhile, the situation in the apartment dispute continues to increase. The city has 935 high-rise apartment building, there are 105 apartments are disputed to varying degrees. Of these, there are 9 very complex disputes.

Another issue is the red book for foreigners. HoREA said the whole city has about 1,000 foreigners who have bought houses but have not been issued red books. This is an urgent matter that needs to be addressed in the near future.

5 bottlenecks remain unresolved

In general, HoREA said that the real estate market in 2017 has continued to restructure and restructure investment to focus on developing more affordable housing segment to meet real needs of people. consumption.

However, the real estate market in 2017 still has some limitations, negative and potential factors that can create uncertainty and risk in the future.

This is the imbalance of housing products, the supply-demand gap, the shortage of social housing, small and medium commercial housing, 1-2 bedrooms, prices of about VND1 billion. Meanwhile, the segment of high-end real estate, luxury resorts have signs of over supply.

Banks’ capital and social capital (mainly homebuyers) pour into the huge real estate market, which tends to deviate from some large firms and into the high real estate segment. grant, travel and convalescence; as well as the increase in many secondary business investors. The real estate market has not developed transparent, healthy, stable and sustainable.

HoREA stressed that the market still has five unresolved bottlenecks, including:

The First is the congestion of land use – this is both a burden and a hidden one, creating a negative “begging” mechanism, which the buyer must ultimately suffer when buying a home.

Secondly, there is a blockage of land clearance leading tom the fact that many unfinished compensation projects can not be implemented, buried capital of enterprises in the long term, no suitable solution.

The third is the congestion of real estate projects that the Land Law and Real Estate Business Law require investors to have a certificate of land use right. While there are mortgage projects as collateral for bank bad debts, but no certificate of land use rights.

Fourth, credit policy is not appropriate, not create medium-term and long-term capital for the real estate market, while the nature of the market is medium-term, long-term. Real estate lending rates are still high (9-11% a year); There is no credit support policy for first home buyers (affordable housing).

The State Bank has not proposed the housing credit package under the Government’s Resolution No. 46/2017 / NQ-CP and has not yet been able to allocate preferential credit capital to four major banks (Vietcombank, Vietinbank, Agribank , BIDV) to implement social housing policy. Buyers of social housing have not yet access to preferential loans at interest rates of 4.8% per year.

The year is the bottleneck of many administrative procedures, prolonged, hidden negative, harassment in the process of approval, implementation of investment projects using land.

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