Market confidence in the Vietnamese residential property market improved through well-attended launches, increasing sales volume and price improvements throughout 2015.
According to real estate firm in its latest Market Outlook, across all segments an estimated 41,787 units was launched in HCMC (pictured) and 28,283 units in Hanoi. A big portion of these numbers focused on becoming “luxury,” with quality varies greatly between developers.
High-end apartments in HCMC had their greatest comeback since the financial crisis in 2012 with 16,674 units launched, clustering along Metro Line 1 in the Eastern part of the city.
Hanoi recorded 6,000 units, with major high-end project located in the CBD – fringe and the West.
These properties targeted buy-to-let investors due to their attractive gross rental yield of between 6 percent and 8 percent. In addition, the affordable segment also accounted for a significant portion of launched supply, and proved to be a good choice to majority of end-users.
Price growth rate is expected to peak in 2016, noted CBRE.
With more discerning buyers and abundant supply, property developers are cautious in price increase in order to ensure sales schedule as planned. Price growth will mostly come from new top-tier properties at very prime and expanding CBD locations asking between US$ 7,500 and US$ 10,000 per sqm for HCMC, and in the range of US$ 1,600 to US $3,500 per sqm for Hanoi.
In terms of demand, CBRE reported that absorption during 2016 is expected to be slightly lower than 2015, then decline in 2017 and 2018 for both markets.
The firm said that foreigners are still examining the local real estate market before proceeding to the next stage. Nevertheless, professionalism, language proficiency and ease of payment are among key issues to prepare for this next wave of customers.