In its latest research report CBRE Vietnam noted that 2014 witnessed positive movements in the Vietnam economy and real estate markets, highlighting brighter outlooks for 2015.
Real GDP growth increased steadily from 5.06 percent in Q1 2014 to 6.96 percent by the end of the year, and headline inflation was controlled at 4.09 percent on average for the year.
Following decreasing deposit rates, average lending rates were lowered to 10 percent. Stability in the macro-economic environment has led to an increase in foreign direct investment (FDI), with real estate ranking second in terms of total FDI in Vietnam.
Looking forward to 2015, CBRE Vietnam sees a range of themes in different areas of the Vietnamese market.
The real estate firm predicts that the residential market will continue to remain positive. Sales momentum is predicted to remain strong, keeping the current pace in both Hanoi and HCMC.
It is expected that new launches will continue their strong run in both cities, especially in locations with improving infrastructure systems (Districts 2, 9, Thu Duc and Binh Thanh in HCMC (pictured), and districts in the West and South East in Hanoi).
Luxury and high-end products will be sought-after, especially in Hanoi, as the stock for these segments is diminishing gradually. The active involvement of both end-users and investors (including speculators) will translate into increased sales volumes. While laws on foreign ownership in residential housing are expected to stimulate demand, activities on this front will be slow in near terms as market players take time to assess market movements.
The revised Law on Housing, decreasing interest rates and reinforced market confidence have zll supported the property market.
Last year saw a sharp increase in the number of new launches in both Hanoi and HCMC. There were 14,807 new units launched in HCMC, 3.2 times higher than in 2013, while in Hanoi a total 16,253 new units were released which was 2.06 times higher than 2013.
There was an increasing trend in new launches from Q1 to Q4, showing improving market confidence from both developers and buyers toward the end of the year.
While the high-end segment was the spotlight in the condominium market for HCMC, with more than 50 percent of sales volume happening in this segment, the mid-end segment was the key performer in Hanoi. Typical examples include Vinhomes Central Park, Masteri Thao Dien, Scenic Valley and Rivergate (HCMC), and Times City, Green Stars, Hoa Binh Green City (Hanoi).
CBRE Vietnam estimated that approximately 26,000 units were sold in both HCMC and Hanoi, a 50 percent increase as compared to 2013’s level.
Primary prices are on an increasing trend in both cities. Projects in prime locations saw an increase of between 10 percent and 20 percent compared with 2013 due to limited stock.
In the low-end segment, newly launched units were also released at increasing price tags of approximately 5 percent and 10 percent compared with units launched earlier in the year.
Secondary unit prices went up by 2 percent year-on-year in Hanoi, while in HCMC they went sideways.
In summary, CBRE Vietnam noted that property prices have been much more affordable over the last five years with smaller-sized units triggering demand from both owner-occupiers and investors.
CBRE Vietnam expects the market will continue to remain positive in 2015 as more new launches or project restarts will be witnessed in the two most happening markets of Hanoi and HCMC.
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
