Residential property market continues to flourish with increased activity last month.
Reports affirm that the residential property market is buoyant. Figures collected for the month of May have revealed a healthy increase in the number of property transactions if compared to the previous month. This is according to the Vietnamese Ministry of Construction.
The hike was reported in two popular investment spots in the country. A total of approximately 1,200 transactions were recorded in the capital city Hanoi, a rise of 14 percent against April. This takes the annual tally for this northern city to 5,400 transactions. In the southern powerhouse of Ho Chi Minh City so far this year there have been 5,870 transactions. For May there was a respectable 12 percent rise from the previous month, equalling some 1,300 property transactions.
According to the Ministry of Housing and Real Estate Development, the majority of transactions focused on the mid and high tier of the market. This is a result of a combination of factors. There is a lack of affordable housing in Vietnam. Additionally, there is a healthy supply at the upper ends of the market. However, the surplus of supply for the top end has reduced since its peak in 2013. A time when many new construction sites sprung up in anticipation of imminent demand. May’s performance has also helped to reduce the inventory of property by just shy of 11 percent since December of last year.
As developers such as Vinagroup start building affordable housing in response to demand, there could be even more inventory added to the existing. However, it should likely help boast the market even further as there is a real thirst for low cost housing.