Ho Chi Minh City can expect a positive impact to its property sector from supporting government policies. This is according to predictions from real estate firm Savills in its latest briefing document on the apartment sector in the Vietnamese city.
In terms of supply, during Q1 2015, seven new projects and new phases in 13 active projects launched – providing approximately 6,600 units, according to Savills. This is an increase of 40 percent quarter-on-quarter (q-o-q) and 137 percent year-on-year (y-o-y).
The first three months of 2015 saw the highest amount of newly-launched supply since Q2 2011, and as of Q1 2015, there were approximately 20,500 available units in the primary market, a sharp increase of 11 percent q-o-q and 32 percent y-o-y.
The overall absorption rate was 21 percent – a decrease of -1 percent q-o-q but an increase of 11 percent y-o-y.
In Q1 2015 more than 4,200 units were sold, up 3 percent q-o-q and 167 percent y–y, the highest transaction volumes since Q4 2010.
During Q1 2015, districts 2 and 7 maintained the most sales with 38 percent of total transaction volume, followed by Binh Thanh, Tan Phu and Binh Tan with a 31 percent share.
Savills noted that Grades B and C apartments continued to have strong performances, accounting for 98 percent of total sales this quarter.
The real estate firm noted that purchasers are able to benefit from various forms of financial support, including flexible payment terms, competitive home loan interest rates, and a stimulus package.
It noted a major factor affecting buyers’ confidence is the developer’s reputation and credibility.
The product mix has become more diverse with various layouts. In all types of apartments, the size of units have decreased, lowering the total unit price and targeting a wider purchaser pool.
In its outlook, Savills said: “Supporting policies in law and finance for the residential market are expected to have positive impact on the performance of the apartment sector.
“In the next three years, approximately 70,100 units from 102 existing and future projects are expected enter the market. Approximately 29 percent of the total future supply is expected to be completed in 2015 and 2016.”
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
