The Vietnamese economy continued to show positive growth in Q3 2015. GDP in Q3 increased 6.5 percent year on year (y-o-y), which 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 6.17percent during the first nine months.
The State Bank of Vietnam issued government bonds highlighting improvements in the economy showing significant yield compression, with an average in Q3 of 6.7 percent and 7.1 percent for five-year and ten-year bonds respectively.
In the long-term, the economy will benefit from domestic reforms and trade liberalisation as a pre requisite of Vietnam membership of the Trans-Pacific Partnership (TPP), the Free Trade Agreement (FTA) and further ASEAN integration.
In its research report on the condominium sector in Ho Chi Minh City for Q3 2015, Colliers recorded approximately 7,900 transactions, up 88 percent y-o-y. The high-end segment continued to dominate the sales volumes with 35 percent of all units sold in the first nine months of 2015.
Compared with the previous quarter, the sales rate showed signs of slowing down as many Asian buyers avoided transactions during the “ghost month” of the lunar year, and developers were slow to place bank guarantees against pre-sales payments as regulated in the 2014 Law on Real Estate Business.
The average primary sale price saw an increase of 2.5 percent y-o-y. In the secondary market the price is reported to increase between 3 percent and 5 percent compared with the same period last year.
In terms of supply, more than 10,000 units from 26 projects were brought to the market during Q3 2015. Local developers took the lead in the supply pipeline whilst foreign developers accounted for less than 10 percent of residential projects in the market.
Developers have started to shift their focus on the luxury apartment market segment. The review quarter recorded a growing number of high-end projects from well-known developers such as Phu My Hung, Capitaland and Novaland. Although demand for affordable housing is high the number of projects for low and medium income buyers is still limited, accounting for only 20 percent of total supply.
In terms of demand, HCMC currently has a population of approximately 7.95 million, accounting for 8.8 percent of the whole nation’s population of 90.4 million people and making it the highest populated city in the country.
The city’s population is currently rising by approximately 200,000 people each year, which is equivalent to a 3 percent y-o-y increase. Given limited residential land within urban districts, there is a strong housing demand for the large number of city citizens in new urban and suburban areas.
In its outlook for the market, Colliers said there are approximately 60,000 units from 90 projects will enter the market from now until 2017. The luxury apartment sector will maintain growth in terms of sales volumes and new supply with interest from buy-to-let investors.
