According to Savills Vietnam, by March 2018, HCMC real estate activity in the office-for-lease segment was at a satisfactory level and rents increased by 8% compared to last year.
Preliminary statistics on HCMC real estate market 2018
– Office for lease: The current occupancy rate is still high (96%), with an estimated 440,000 sqm by 2020. In the next two years, there will be four new projects, one for B and three for C with about 53,000sqm for the market. Total supply reached 1.7 million square meters, up 10% year on year.
– Retail: With a total supply of 1.2 million sqm, including 73,000 sqm of new floor from 3 supermarkets, 2 shopping centers. Three projects were closed, three projects changed functions, reduced 39,200 sqm floor. Average rents and occupancy rates fell slightly by -1% quarter-on-quarter.
– Service Apartments: HCMC Real Estate segment this only in Q1 / 2018 are three new projects and one project must be closed for renovation, this led to a 6% / quarter and 16% / year. Total supply has reached over 5,100 units. Occupancy declined by 3%, while rents rose slightly by 1% quarter-on-quarter. In the future, the expected supply of serviced apartments will have more than 1,000 units and will officially enter the real estate market in HCMC in September next month 2018.
– Hotels: Hotel supply increased by 2% / year, reaching 16,500 rooms with 133 projects. The occupancy rate was 74%, up 6 percentage points year-on-year. Average room rates are around $ 83 / room / night, up more than 4% per year. In 2018, TP. Ho Chi Minh City is aiming to welcome about 7.5 million international visitors, expected to grow by 18% year-on-year. It is estimated that by 2020, 14 new projects will be completed and will provide about 3,500 rooms and 300 rooms from 4 to 3 star hotels awaiting appraisal.
– Apartments for sale: HCMC real estate apartment segment has 13 existing projects with more than 10,500 units and 9 existing projects are open for sale in the next phase. Supply dropped -13% quarterly, -32% year-on-year and only 28,600 units. The sales of all units decreased by 13,500 units, down by 11% quarter-on-quarter but up 51% year-on-year. Grade C dominates the market with 62% market share. Absorption rate increased by 1 percentage point quarter-on-quarter, 26 percentage points year-on-year, reaching nearly 48%. It is expected that by the year 2020, the supply of apartments will have an additional 122,000 units from 93 projects. Particularly, District 9 is expected to account for the largest share with a total of 32%. Currently, the segment of low-cost apartments is the tourist segment and received attention, attention should be expected to occupy the highest with about 61% of future supply.
Opportunity for foreign investors
According to experts, in 2018, foreign investors will have more opportunities to “encroach” into the real estate market in HCM City thanks to the policy of calling for investment to rebuild 13 / 15 old buildings of grade D of the city. In addition, with many domestic investors holding large land funds in the East Saigon area in the process of seeking potential financial partners for investment, development will open up great opportunities for foreigner businesses wanting to jump into this fertile property market.
Also statistics of the HCMC Real Estate Association, now about 300,000 billion of bad debt will be resolved from the current time to 2020. Of which, about 60-70% will be guaranteed by the future. Assets are real estate. If it handled 80% of bad debt through M & A, it could bring a series of real estate projects worth about VND150 trillion to operate again.
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