Luxury units entice developers
Luxury units entice developers
Despite an expected oversupply in 2017, high-end and luxury apartment development in Ho Chi Minh City is still on the rise.
Luxury developments will account for a notable slice of the high-end launches. One contributor is Trung Thuy Group, which will launch 600 luxury units of Lancaster Nguyen Trai in the second quarter of this year. This is a super high-end project, with prices estimated to start at VND15 billion ($660,000) per unit.
A sales representative from Trung Thuy Group said that they believe in the liquidity of this project. Its list of previous buyers is a good start.
“We are well-established with these previous buyers, and we believe that this project will also be well-received when we launch it,” said a salesman for Trung Thuy.
Meanwhile, SonKim Land – the developer mostly focused on high-end properties – will begin investing in nearly 10 projects this year.
SonKim Land recently introduced a 17-floor Serenity Sky Villas at 259 Dien Bien Phu street in Ho Chi Minh City’s District 3, scheduled for completion in 2018. The firm is also developing the Gateway project, for completion in the last quarter of 2017.
In addition, SonKim Land joined forces with Hong Kong Land to launch the Nassim project in Thao Dien ward in the southern city’s District 2, which is expected to be ready in the third quarter of 2018.
Him Lam Land also plans to enter the high-end segment this year with a project in District 1. This product, according to Ngo Quang Phuc, deputy general director of Him Lam Land, will list from VND10 billion ($444,400) per unit.
Novaland, another major residential developer, is also launching the second phase of Me Linh Tower in District 1, with prices ranging from $4,000-8,000 per square metre.
The Kenton Node, invested by Tai Nguyen Real Estate Company, will launch 2,000 high-end units soon. Prices start from $3,000 per sq.m, in a mixed-use tower also containing a five-star hotel, convention centre, and entertainment centre.
Supported by sound macro-economic factors, including positive GDP growth, a stable exchange rate, and high inflow of foreign direct investment to Vietnam from Korea, Japan, and Singapore – especially to real estate – the condominium market is expected to remain a sector driver in the coming year.
According to CBRE Vietnam, a total of 43,861 units are expected to be launched in 2017. Out of this total, 1,627 will be luxury units in six projects at the heart of Ho Chi Minh City. The high-end segment will account for a notable proportion of the overall market with over 13,000 new units.
CBRE Vietnam further predicted that the luxury segment is forecast to maintain its current high absorption level at more than 50 per cent. The limited land available for residential projects in Ho Chi Minh City’s central business districts is a key factor that enhances the appeal of luxury projects.
“As prices of luxury projects in Ho Chi Minh City are still low compared with other cities in Southeast Asia, this segment is still attractive to affluent locals as well as to foreigners, whose home ownership rights in Vietnam were considerably relaxed in 2015,” said Duong Thuy Dung, director of research and consulting at CBRE Vietnam.
In terms of price outlook, the luxury segment is expected to see a significant hike of 7 per cent on-year in 2017, thanks to the introduction of more unique offerings in prime locations. The high-end segment is expected to see a price improvement of about 4 per cent on-year overall.
