Real Estate Increase At The End Of The Year

The real estate market in both HCMC and Hanoi increased sharply in the end of the year in all segments and office leasing.

On November 29, Savills Vietnam Co., Ltd. has published real estate price index in November 2016 for Ho Chi Minh City and Hanoi.

In Ho Chi Minh City, the housing index rose 0.6 points quarter-on-quarter and 4.5 points year-on-year. Trading volume was approximately 7,500 units, up 7% quarter-on-quarter and 43% year-on-year. The absorption rate was 19%, up 2 points on a quarterly basis due to the good performance of Grade A and C.

While the A and C segments were high, the volume of Class B transactions fell 12% quarter-on-quarter. Grade C reached over 3,700 units, accounting for 50% of the total trading volume of the quarter. The performance of Grade A was relatively good at 780 transactions, up 140% quarter on quarter.

Roads in Saigon dense projects

Thanks to the price that suits most buyers, the C-class segment attracts a large number of buyers with real demand. The owners provide reasonable prices thanks to development objectives in areas with large land funds, cheap land prices and infrastructure is gradually improving.

In Ho Chi Minh City, the areas around Vo Van Kiet Boulevard and Pham Van Dong Boulevard are hot spots for the development of the C-segment.

Bureau indexes also increased by 2 points in the quarter and 7 in the year. Average capacity reached a new peak, at 98%.

Grade A center projects are well run with capacity increasing by 4% quarterly and yearly. Central office performance index increased by 2 points on a quarterly basis and 5 points on a yearly basis.

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The non-CBD area also performed well with a capacity increase of 2 percentage points quarter-on-quarter and 6 percentage points year-on-year. Office performance index increased 2 points on a quarterly basis and 10 points on a yearly basis.

Grade A and B office rents continue to rise due to rising demand while new supplies are lacking. Savills forecasts rents will increase 4% per year over the next two years.

Real Estate in Hanoi: Buyers benefit both in price and opportunity

In Hanoi, the house price index was 105.8 points, up 1 point on the quarter with average selling price reached 27.6 million.sqm. The absorption rate in the primary market is about 33%. Tu Liem led the way with 1,800 units sold, equivalent to 44% absorption.

Grade B had the biggest sales in the sixth consecutive quarter with 51%. While Class A sold 130 units and the absorption rate of Class B was 2,900 units. Grade C was active with an absorption rate of 33%, up 8 percentage points to 2,620 units sold.

Hanoi office index rose 1 point quarter-on-quarter and 3.2 points year-on-year thanks to a 2 point increase in occupancy. Central area increased by 1.7 points per year. Off-center indexes increased 1.8 points quarter-on-quarter and 5.1 points year-on-year.

According to Savills Vietnam, in the next two years, the central area of Hanoi will have limited supply. While the non-CBD area with abundant land funds will face competitive pressure from large future supply and significant vacancy.

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