According to the latest study on Ho Chi Minh City real estate price index announced by Savills Vietnam, the absorption rate of the high-end apartment market in Ho Chi Minh City dropped by 50% in the first quarter of 2017 and forecasts this segment will enter the fierce competition for customers.
Supply increased sharply
In the past five months, Ho Chi Minh City real estate market has received many high-end real estate projects from big investors.
For example, at the beginning of 2017, Kepple Vietnam launched the next two towers of The View Riviera Point in District 7 with more than 600 apartments. In addition, the company also launched more than 1,000 apartments priced at 3 billion per unit or more at two projects in District 2 is Palm City and Thu Thiem Empire city.
However, the Novaland Group is considered to be the most luxurious apartment unit in HCMC for the first half of the year. The projects that Novaland marketed mainly in Tan Binh district with 7 projects on Pho Quang, Hong Ha Street.
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In addition, on Nguyen Van Troi, Phu Nhuan district also has two projects, then the projects in District 7, District 2 is also continuously being opened by Novaland sell the next stage. These projects provide more than 2,000 apartments, selling at 2.5 billion or more.
In addition, Phat Dat Real Estate Development Joint Stock Company has also launched new projects in the last five months, including the Millennium project at Ben Van Don Street, District 4. The project has total area 7,302.6 sqm, including twin towers 34 floors and 3 basements.
In addition to new projects, in the coming time, the market will continue to welcome the new supply from the revitalization projects. For example, there is the Kenton Node project of Tai Nguyen Construction – Trading and Manufacturing Company.
The project is located at Nguyen Van Linh – Nguyen Huu Tho intersection, District 7, consisting of Sky Villa, Residence and Plaza. The project has 9 buildings and the original apartment structure is 1,640 luxury apartments. There is also a Lacasa project, District 7 with a size of 6 hectares with 2,000 apartments, including office-tel in the medium segment was newly acquired by An Gia from Van Phat Hung.
That is not to mention the small and medium projects of many other investors “quietly” hit the market and still labeled high. Meanwhile, according to the Ho Chi Minh City Real Estate Association (HOREA), due to credit is gradual with the high-end segment should make people want to become more cautious.
At the same time, Nguyen Van Hau, a real estate expert in Ho Chi Minh City, also said that the season is a lot of choices, so their consideration when investors launch a series of projects into the market is normal. At the end of 2015, a series of real estate giants poured capital into the Sala – Masteri – Tan Cang – Ba Son Quadrangle (HCMC). It is estimated that there are about 30,000 apartments with prices ranging from more than $86,957 to $434,783 per unit deployed in this area.
Continue to complete harshly
The reporter’s study showed that the high-end segment of the real estate quietly in the past, in part due to the land fever, causing investors’ cash flow to rush into the suburbs.
In addition, the investment of high-end apartments for rent is outdated, because foreigners are now buying houses in Vietnam. Therefore, the demand for rent from this department is no longer a good piece of cake for secondary investors … Not to mention, if deducted from the cost, the profit from the investment in rental apartments is less than the interest in the bank.
Mr. Vu Duy Lam, Investment Director of Coteccons Construction Joint Stock Company admits that the market is showing a high supply of high priced houses.
“I believe in 2017 the market is still good, but nobody knows what the situation will be in 2018,” Lam said.
Similarly, Savills Vietnam also said, while liquidity is falling sharply, the supply of high-end apartment segment continues to be huge. Expectedly, from quarter II / 2017 to 2019, HCMC apartment market will receive an additional 62,200 apartments, with high-end apartments are not small.
With the large supply as above, surely the segment of luxury apartments will enter the fierce competition. Only those projects that really qualify the owners of proven new credibility can make customers down money.
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