In its Q3 report on the Hanoi Condominium Market Research Report, real estate firm Colliers reported that the number of property transactions in the Vietnamese city of Hanoi rose by a staggering 154 percent during Q3 compared with the same period last year.
In Vietnam as a whole, GDP in Q3 increased 6.5 percent year on year (y-o-y), which it said is the highest growth rate among the six key economies of Southeast Asia. Total retail sales and consumer services in the first nine months of 2015 were estimated at VND 2,374.5 trillion, up 9.8 percent compared to the same period last year.
The CPI increased nominally at 0.74 percent y-o-y, the lowest level in the past 10 years. FDI pledges year to date, rose 53 percent from a year ago to US$ 17 billion, with strong inflows into the manufacturing sector and production of export goods, and the associated services sector, rose 6.17 percent duringthe first nine months.
The State Bank of Vietnam issued government bonds highlight improvements in the economy showing significant yield compression, with an average during Q3 of 6.7 percent and 7.1 percent for five-year and ten-year bonds respectively.
In the long term, Colliers said the Vietnamese economy will benefit from domestic reforms and trade liberalisation as a pre-requisite of Vietnam’s membership of the Trans-Pacific Partnership (TPP), the Free Trade Agreement (FTA) and further ASEAN integration.
In terms of property and real estate market performance, prices for both luxury and mass-market homes in Hanoi continued to witness moderate growth during the three-month period ending September 2015.
The average primary sales prices of high-end projects saw an increase of 2.65 percent q-o-q, sitting at US$ 3,797 per sqm, while that of mid-end and affordable projects remained stable on a quarterly basis at US$ 2,316 per sqm and US$ 1,164 per sqm.
In the secondary market the price was reported to have increased by between 4 percent and 6 percent compared with primary prices.
The review quarter recorded approximately 6,880 transactions, up 154 percent compared with the same quarter last year. Projects with convenient traffic connections, good locations, existing residents, a modern infrastructure and facilities were popular options among the successful transactions.
Looking at supply, Colliers reported approximately 9,100 units from 26 projects were brought into the market during Q3 2015. The mid-end and high-end segments were dominating new launches and offering more options for buyers.
Significant mid-end projects in Hanoi, according to Colliers, included Green Stars in Bac Tu Liem, Park View Residence in Ha Dong, The Residence in Hoang Mai District and Five Star Tower in Thanh Xuan District. The luxury sector added Golden Palace in Le Van Luong and Mulbery Lane in Ha Dong to its stock.
In anticipation of improved buyer sentiment the supply pipeline will see an additional 13,000 units from large scale residential projects before the end of this year.
With strong population growth, Hanoi continues to experience high demand for housing. From last year until now market sentiment has significantly improved as first-home buyers start to believe house prices may not decline any further, and are starting to embark with their transactions.
In addition an interest rate cut for home loans at 6-7 percent per year has motivated home buyers. Cooperation between developers and commercial banks to offer competitive home loan packages helped raise market confidence.
In its outlook, Colliers said that transactions are expected to increase towards the end of the year. Units ranging from 40 sqm to 70 sqm, and with a reasonable selling price of between US$ 670 per sqm to US$ 800 per sqm will be the buyers’ favorite option.
In the long term the luxury segment may see price reductions to incorporate more market demand. Other market segments will continue to witness price growth, thanks to positive macro-economy, a reduction in available property alongside completed infrastructure projects.
To read the full Colliers Vietnam Hanoi Condominium Q3 Research Market Report click here.
