Savills Vietnam releases property index in Ho Chi MInh City May 2013

May 23rd at 23:49

23-05-2013 23:49:56+07:00

Savills Vietnam, one of the first property consultants to release its owned property index today confirmed that the first quarter of 2013 residential index stood at 89.2, a slight decrease of -0.4 index points quarter-on-quarter (QoQ) and -3 index points year-on-year (YoY).

The majority of projects that had price reductions still had sluggish performance.

“Although there is strong supply, the absorption rate this quarter remained stable due to the improved number of sold units. The number of sold units increased 2 per cent QoQ and 25 per cent YoY. The ‘sold’ volume has been trending upward for three consecutive quarters,” it cited.

Since the base period of early 2009, the average market price including new projects has decreased by approximately -22 per cent whilst the index, which is calculated on the constant project basket only decreased by -11 index points.

“This shows that the downtrend in the average price is mainly due to the lower price of newly launched projects rather than price adjustment of existing projects,” according to Savills’ press release.

Although the downward trend of the residential price index continued this quarter, the rate is slowing. Combined with the significant improvement in transaction volume, a gradual market recovery and more stabilisation might be expected in the near term, it continued.

Regarding the index in office segment, the consultant said that the QoQ office index rose sharply in 2006, peaked in the second quarter of 2008 and then dropped sharply during the two latter quarters of the same year. Since 2010, the market has been in a downward trend.

The office index in the first quarter of 2013 stood at 73, an increase of 1.7 index points QoQ.

“Despite a slight decrease in average market rent, increased occupancy this quarter has helped to bring up the index,” it commented.

The CBD area performed better than the non-CBD in terms of both rent and occupancy. As a result, the CBD index rose slightly by one index point QoQ whilst non-CBD decreased by -3 index points.

Along with improvement in the index, market take-up also had substantial increase of 173 per cent QoQ and 70 per cent YoY.

“These are very positive indicators for a more stable and improving performance of the office market in the upcoming quarters,” it cited.