November 12, 2019 13:51

Advertisement Contact us RSS Vietnamese

Supply of real estate is limited in Hanoi and Ho Chi Minh City

10:08 | 17/10/2019

VCN - According to a report by the Vietnam Real Estate Brokers Association, in the third quarter of 2019, the real estate market of Hanoi and Ho Chi Minh City tended to level off due to limited supply. Meanwhile, other markets such as Thanh Hoa and Nghe An are increasingly active.

Subdued in big cities

A report on the real estate market in the third quarter of 2019 published by the Vietnam Real Estate Brokers Association on October 10 shows that the market is declining sharply compared to the same period in 2018.

supply of real estate is limited in hanoi and ho chi minh city
Real estate market in the first nine months of 2019 witnessed a strong rise of projects in provinces and cities.

Mr. Nguyen Van Dinh, Deputy General Secretary of Vietnam Real Estate Association (VnREA) said that real estate prices in Hanoi market in recent years have almost gone sideways.In Hanoi, in the third quarter of 2019, the real estate market marked a decline in both supply and transactions compared to the second quarter and the same period of 2018.

In particular, this is also the time when the rate of absorption of projects in Hanoi was the lowest in the past three years.

In Ho Chi Minh City, the third quarter of 2019 saw the rate of residential real estate transactions increase sharply. However, the number of projects with new products offered to the market is limited, especially low-price apartments.

"Low-price apartments in Ho Chi Minh City have been pushed beyond VND25 million per m2 and become the mid-end segment. Therefore, in Ho Chi Minh City, there are no low-priced apartments in the third quarter," Mr. Dinh said.

Regarding the situation in the third quarter of 2019, the Vietnam CBRE company announced the results of the Hanoi real estate market survey in the third quarter of 2019 with some notable information about the housing segment and office leasing market.

CBRE's report published on October 9 shows that, in the third quarter of 2019, nearly 6,100 apartments were offered from 18 projects across the city, down 33% from the previous quarter. Accordingly, in the first nine months of 2019, about 26,800 new apartments were launched, 37% higher than the same period in 2018.

The projects located in the Western region accounted for about 77% of new supply in the quarter. Notably, the Hanoi housing market shows a tendency to expand beyond the CBD with projects in new housing areas such as Thanh Tri and Hoai Duc districts.

In terms of sales, although there were 4,800 apartments recorded for sale in the third quarter of 2019, it was down 32% compared to the previous quarter.

Exciting in localities

According to the Vietnam Real Estate Association, highlights in the third quarter of 2019 are from Thanh Hoa and Nghe An markets. These markets are becoming very exciting with urban projects and land auctions. In particular, the absorption rate in these areas reached 90%.

Nghe An and Thanh Hoa are also identified as markets in the fourth quarter of 2019 because the development of projects here is taking place very strongly.

"Some areas with real estate markets have been developing strongly in the past few years continue to show signs of decline due to policy and credit issues, as well as interest rates of banks. Limited supply and transactions mainly come from the projects that have been offered earlier. There are even situations where some projects close the list of goods and stop trading due to unsatisfactory legal conditions or unsold goods.”

“Some new markets such as Hoa Binh, Yen Bai and Lam Dong gained a lot of attention from investors. However, development projects in these areas are in the preparation stage of investment, so no products are offered," Mr. Dinh concluded.

For market demand in the fourth quarter, according to the leader of the Real Estate Brokers Association, in Hanoi, the market continues to develop stably and sustainably – prices do not fluctuate. It is estimated to increase by 1- 2%. Supply may not increase, in which the proportion of the housing segment does not change much. Transactions may exceed the third quarter of 2019 but not to reach the same period in 2018.

With Ho Chi Minh City, according to the forecast of the Vietnam Association of Real Estate Brokers, the situation has not changed much in terms of mechanisms and policies. Therefore, new sources of goods from projects will continue to be scarce and likely decrease compared to the third quarter of 2019.

Especially, it is the lack of affordable housing segment. Transactions continue with high absorption rates, maintaining at over 90%. In particular, real estate prices can continue to increase from 3-5%.

In some other regions, the supply and transaction volume of the Southeastern provinces may decline sharply after the Alibaba case, leading the authorities to control more tightly, so it is difficult to launch new projects. Besides, there are also situations where investors and consumers are afraid of buying and selling real estate.

Da Nang, Nha Trang, Quang Nam and Quang Ngai continue to be quiet, not much has changed because there has been almost no sign of improving the investment environment and promoting project development.

The Northeastern provinces such as Thai Nguyen, Bac Giang, Bac Ninh, Quang Ninh, Hai Phong and Hung Yen may prosper over the third quarter with strong investment demand at the end of the year for small investors.

Markets in the North West provinces in the fourth quarter will not have any changes despite being a potential market, but most of the projects in this area are in the stage of investment preparation, so no products being eligible to sell to market.

Nghe An, Thanh Hoa will be the market in the fourth quarter of 2019 because the development of projects here is taking place very strongly.

In the future, the Hanoi real estate market is expected to welcome a large amount of new supply coming from large-scale urban projects. Market supply is expected to expand further to the north and south of Hanoi, notable projects are implemented such as BRG & Sumitomo Smart City in Dong Anh and Gamuda Lakes in Hoang Mai.

By D.Ngan/ Binh Minh