The situation was mixed in terms of liquidity and expectations of real estate investors in the two regions.
The real estate market in Hanoi is slowing down after the acceleration at the beginning of the year, while Ho Chi Minh City has a spectacular breakthrough compared with the first 3 months of the same period in 2016.
Real estate market survey in Hanoi and Ho Chi Minh City, released by CBRE on June 29, shows a clear picture of the markets of the two largest cities in the country in the second quarter of 2017, particularly noticeable is the opposed trend in liquidity and expectation of the investors in the two regions.
Hanoi is shortness of breath
Survey of apartment market in Hanoi in the second quarter of 2017 of CBRE showed that a total of 8086 apartments were offered to the market from 27 projects, up 23% over the same period last year but decreased to 14% compared with the previous quarter.
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The most noticeable point is that the majority of apartments opened for sale comes from the next openings of large projects, instead of new apartments being launched for the first time as the first quarter. According to gender in the profession, this shows that most of the projects still exist a lot of goods, most of which are a number of apartments with the area, location, number of floors, direction…Not favorable in view of the majority of buyers.
In terms of supply, similarly to previous quarters, most of the new supply came from the West and South West of Hanoi, accounting for 68% of total new units opened this quarter.
In addition, the East also accounts for 20% of the total new supply coming from the new project in the Ecopark. By segment, the mid-end segment accounted for the highest proportion of new openings in the last few years. In the second quarter of 2017, this segment accounted for 55% of total new openings.
Particularly, in terms of liquidity, in the second quarter, a total of 4,650 units sold, down 24% from the previous quarter. This fact has brought some disappointment to investors, so most expect liquidity will be more exciting in the following quarters when some projects attracted the attention of the open market to sell. Sales of more than 50% of the sales openings are recorded in the prime location projects and are invested by reputable investors.
Regarding the offer price, there are not too many changes in the average price over the previous quarter both in the primary and secondary markets. Notable for this quarter, the premium segment was the only segment where prices increased in both markets, with gains of 1% and 3% respectively in the primary and secondary markets.
In the second half of 2017, in addition to supplies coming from the West and Southwest, there are plans to open new sales projects in the central district. By segment, the market is still waiting for popular projects developed by reputable investors. Among them, the most interesting factor is still the popular price and new standards of quality, the structure of apartment and utility for residents.
Meanwhile, in the segment of attached homes, including villas and adjoining units, the number of units opened for sale in the second quarter was lower than the 1,200 units of the previous quarter, mainly coming from small scale projects. Meanwhile, some large-scale high-end projects are expected to open for a long time but delay the delivery.
However, the market still has about 1,205 units have been recorded to buyers. New high-priced projects such as Vinhomes The Harmony, Romantic Park, Starlake and Gamuda have made the primary market continue to stabilize at $ 3,700 per square meter. Along with that, secondary prices in the market also increased by 1.7% over the previous quarter and 4.3% over the same period last year, to $ 3,826 / sqm. Most of the urban districts such as Dong Da, Tu Liem, Ha Dong and Thanh Xuan saw prices rise by 0.8% to 6% compared to the previous quarter.
Ho Chi Minh City is “brighter”
As predicted from the first quarter, the real estate market in HCMC has been active again in the second quarter of 2017 after investors have completed the strategy of selling and evaluating products. The number of units offering new and the number of units of consumption increased. The total of 9,580 new offers from 31 projects was received in the second quarter of this year. Although 7% lower than the same period last year, the new offering units in second quarter of 2017 increased 80% compared with the previous quarter. 64% of sales offered from newly launched projects.
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Intermediate condominiums continue to account for the largest share of total new supply, accounting for 56%. However, in terms of growth, the high-end segment grew by 141% and will continue to increase in the second half of 2017, with many projects coming from famous developers. The popular segment increased 19% in the previous quarter with 1,575 units while the luxury segment continued to remain quiet and there was no new offering.
According to the location, the East regained top spot and was the most active area, accounting for 36% of new supply. The West continues to record the number of units offering high 3,268 units accounted for 34%, mainly middle-class apartments. In the South, only 2,408 apartments are offered for sale in District 7. North added a total of 486 units from a project in District 12.
In the second quarter, the market also recorded positive consumption. Total sales were up 9,522 units, up 40% quarter-on-quarter and up 59% over the same period last year. The medium segment continues to lead the market with 4862 units sold, accounting for 51% of total sales. New projects sold in the quarter recorded 5,765 units sold accounted for more than 60% of total consumption. In addition, new offering projects account for about 504% of total sales per quarter. The mid-market segment continues to lead the market with 4,862 units accounting for 51% of total consumption.
The average asking price reached 1,578 USD / sqm, down 1% from the previous quarter and an increase of 9% over the same period last year. Offer prices dropped slightly as the number of newly launched projects in the mid-end and mid-end segments increased. Selling price improved in District 7 and District 10 from the second phase of the sale of projects.
Remarkably, based on the transactions made by CBRE Vietnam in the first half of 2017, foreign buyers are more confident and diverse. Foreigners account for 59% of successful transactions. Buyers from Singapore, Taiwan, South Korea and Hong Kong are considered to be the most active, and the market is moving toward the buyer’s group. Residential buyers increased 9% while rents fell 19% from the first half of 2016.
Looking at market prospects, improvements in infrastructure and macroeconomic factors continue to support the real estate market. In the second half of 2017, the premium segment will be more active. A number of projects in prime locations have begun taking place at the end of second quarter of 2017. With the entry of high-end products, average market prices and foreign buyers are expected to increase in the second half of 2017.
In the residential segment, by mid-2017, although the East still dominates the new supply market with about 68%, the market has witnessed new offers coming from different regions, including the emerging area of West (Binh Tan District) with 13% of total new supply. The North and South respectively account for 10% of total new supply.
On the absorption capacity, the whole market has 817 products sold, from new projects and existing projects, decreased slightly from the previous quarter, but average selling price and the price in the primary market increased by 15% compared to the same period last year and decreased slightly by 1.5% compared to last quarter.
Due to the constraints of new supply, secondary market activity has become more active, especially for commercial townhouses and commercial buildings. Secondary prices for recent built townhouses / commercial townhouses witnessed rapid increases in districts 2 and Go Vap; Prices for well-positioned products may increase by up to 30% during the quarter.
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