Apartment market has multi-dimensional developments
Information on the real estate market in the first quarter of JLL Vietnam shows that the number of high-end apartments, including high-end, luxury and super luxury apartments in the two major cities of Hanoi and Ho Chi Minh City, for sale decreased compared to the previous quarter. Many investors continue to apply discount policies and extend payment terms to attract buyers.
Regarding supply, in Hanoi, this quarter there were no new high-end apartment projects . Regarding transactions, the number of apartments sold in the first quarter was nearly 770, concentrated in large projects.
In Ho Chi Minh City, in the first quarter, there were nearly 3,000 high-end apartments, mainly from a subdivision in the Vinhomes Grand Park urban area (District 9) - the only project licensed for signing sales contracts in this quarter. 87% of the apartments sold in the Ho Chi Minh City market came from a subdivision of a metropolitan area that was introduced before its official opening for sale this quarter.
Supply and transactions of luxury apartments in Hanoi in the first quarter were low (Illustration photo: Ha Phong).
Notably, according to the reporting unit, the prices of luxury apartments in the markets of these two major cities were mixed in the first quarter.
Specifically, the average price of luxury apartments in Hanoi reached USD 2,966/m2 (VND 69.5 million/m2), up 2.28% quarter-on-quarter. Meanwhile, the primary selling price of luxury apartments in Ho Chi Minh City reached USD 5,830/m2 (about VND 137 million/m2), down 9.3% quarter-on-quarter. For the secondary market, prices continued to decrease slightly by 0.4% quarter-on-quarter amid falling demand.
According to a report by Batdongsan.com.vn, after a significant increase in the fourth quarter of 2022, the asking prices of apartment segments in Hanoi and the mid-range and high-end segments in Ho Chi Minh City have all decreased. As of the first quarter of this year, the asking prices of apartments in the two cities have not fluctuated much compared to the same period last year, except for the high-end segment (over 50 million VND/m2) in Hanoi, which decreased by 10%, and the affordable segment (under 35 million VND/m2) in Ho Chi Minh City, which increased by 13%.
A recent report by DKRA Group shows that the supply of apartments in Ho Chi Minh City and surrounding areas is only 44% of the same period last year, mainly concentrated in the Ho Chi Minh City and Binh Duong markets. In particular, the product line of apartments under 2 billion VND attracts the attention of buyers.
Will trading remain weak?
According to Ms. Trang Le - Senior Director of Consulting and Research at JLL Vietnam, the Government 's drastic intervention through Decree 08 to reduce liquidity pressure for real estate corporate bonds will have a positive impact on the entire market in the short and medium term. In addition, the State Bank's moves to lower interest rates are also expected to help clear the capital flow that has been blocked in the past year, focusing on developing ongoing projects for early completion, creating supply for the market.
It is forecasted that in the next 9 months, the Hanoi market will receive about 2,500-3,000 high-end apartments. Most of these products will come from new subdivisions or the next launches of developing projects located in the East (23%) and West (68%).
According to forecasts, the upcoming transaction rate of luxury apartments will still be weak (Illustration photo: Ha Phong).
Meanwhile, in Ho Chi Minh City, supply is under pressure due to cautious sentiment amid economic uncertainty and lingering legal issues. Accordingly, the high-end apartment market is expected to welcome about 6,000 units in 2023.
Similarly, demand in the HCMC market is forecast to remain weak, especially in the first half of 2023 when the market continues to face economic difficulties that affect housing investment decisions.
Besides, according to her, price growth is likely to continue to be hampered by weak demand and new supply.
Ms. Do Thi Thu Hang - Senior Director, Consulting and Research Department, Savills Hanoi - said that in the period of 2020-2024, the number of apartments handed over will decrease by 36%/year. This will boost secondary market demand and strengthen investors' confidence.
Regarding the recovery of the apartment market, Ms. Hang assessed that most investors are still pursuing new investment opportunities. Improving infrastructure, affordable products and diversifying utility services are key factors for the success of apartment projects. In addition, the revised laws are expected to bring development potential to the housing market.
According to the records of Dan Tri, due to high interest rates, the high-end and luxury segments in the market are currently quiet. Meanwhile, affordable apartments are having good transactions at this stage.
For example, apartments in areas such as Linh Dam (Hoang Mai), An Khanh (Hoai Duc), Sai Dong (Long Bien) have been actively transferring secondary properties since last February. Two-bedroom apartments priced from 1.5 to 2.5 billion VND have attracted great interest and good purchasing power.
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