Condominium real estate markets in Hanoi and Ho Chi Minh City (HCMC) experienced remarkable changes during the first half of the year, according to the latest research release from CBRE Vietnam.
Condominiums for sale was the most active of all property sectors, and in terms of supply, the number of new lauches in both cities saw improvements q-o-q; yet slight decrease y-o-y.
In particular, the HCMC market saw a continued strong increase in new launches, and added 10,107 units, up by 20 percent q-o-q but a minor drop of 9 percent y-o-y, the real estate firm noted.
In Hanoi, a total of 6,100 new units were launched from 17 projects, increasing by 19 percent q-o-q but decreasing by 23 percent y-o-y.
According to CBRE Vietnam, this second quarter saw the return of high-end apartments in Hanoi, with a project that had been first launched in the beginning of 2015, and two newly-launched projects, providing about 700 units in all.
In HCMC market, net absorption plunged by 17 percentage points y-o-y and nine percentage points q-o-q to 16 percent in Q2, posing a threat of oversupply according to the agency, since sales volumes could not catch-up with new launches in recent quarters. Additionally, the pent-up handover with a growth rate of 100 percent y-o-y in the next 18 months also put a question mark on the viability of the rental market.
CBRE Vietnam also noted there were raising concern over recent legal disputes between developers and the residents. Cases such as pledging projects as bank’s collaterals without any notice for residents, handing over the unfinished building or land dispute between the landowner and the developer are widely reported.
Meanwhile in Hanoi, with slower pace of supply, sales activity continued to show positive signals. A total of 4,860 units were sold during the second quarter, increasing 20 percent q-o-q. The portion of transactions in high-end apartments reached a certain level, especially from newly launched projects.
In terms of pricing, sensing the quiet market sentiment, developers in HCMC dropped their asking prices to an average of US$ 2,009 per sqm, down by 1 percent y-o-y and 0.3 percent q-o-q. On the other hand, the selling prices of luxury segment rose 2 percent thanks to Vinhomes Golden River.
In Hanoi, CBRE Vietnam noted that some projects had increased prices by between 4 percent and 6 percent compared to last year, especially the ones with good locations, average distance to the city centre, and in the vicinity of infrastructure projects that were under construction. The rises in price took place mostly in the high-end and mid-end sector.