Falling home prices create buyer's market
Falling home prices create buyer's market
Home prices have continued to decline in Ha Noi and HCM City, leading to an improvement in property sales, according to a report released by Savills Viet Nam early this week.
In the second quarter, the Savills Property Price Index (SPPI) for Ha Noi residential area was 104.7, dropping 3.6 points quarter-on-quarter and down 17.7 points year-on-year.
The index has decreased for eight consecutive quarters by roughly 25 per cent since its peak at 138.7 in the second quarter of 2011.
The inventory ratio decreased two percentage points, reaching 93 per cent. "It is a good sign for the overall improvement of the market's performance," the company said.
The average apartment price has decreased 30 per cent in the last two years due to the entrance of new projects and price reductions.
In HCM City, the residential price index stood at 89.4 in the second quarter, with a slight increase of 0.2 points quarter-on-quarter, but decreased by 3 points year-on-year.
The absorption rate increased one percentage point quarter-on-quarter and two percentage points year-on-year to 8 per cent.
The number of transacted units surged 59 per cent year-on-year, and the volume has been trending upwards for four consecutive quarters.
The increase of newly launched apartments with lower selling prices led to the decrease in the average market price by 21 per cent in four years since 2009.
Savills noted that the residential price index had gradually climbed up since the bottom of the second quarter last year.
"Thanks to flexible prices, better product mix and Government policies such as lowered interest rates, the confidence of home buyers rose indirectly. The substantial year-on-year increase in transaction volume is a sign that the market is recovering," the company said.
Meanwhile, in the office sector, the SPPI for Ha Noi dropped 12 points year-on-year to reach 56 in the second quarter. The office index stood at 71, down 4.2 points over the same period last year.
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