2018 sees robust realty developments in Hanoi, Danang: Savills
2018 sees robust realty developments in Hanoi, Danang: Savills
The real estate market witnessed multiple exciting activities in both Hanoi and the central coastal city of Danang in 2018, said experts at the real estate consultancy Savills Vietnam in a recent statement.
In Hanoi, Grade B residential projects, particularly villas, townhouses, semidetached townhouses and shophouses, were very well received in 2018. However, despite the high demand within the market, there was a proven shortage in the supply of this sector.
Also, Grade A projects operated relatively well in the first half of 2018 in the capital city, according to Savills. Due to the high urbanization rate, convenient transport, improved infrastructure and enormous commercial potential, the market witnessed spectacular breakthroughs in prices throughout the year.
Investors are therefore expecting the growth of the luxury developments, especially in the booming market of Vietnam, noted the firm.
Meanwhile, the land segment in Danang was active and lively. In 2018 Savills reported high demand and requests from customers seeking second homes.
Investors have changed their perspective of the second-home market in general and this segment in Danang in particular. Projects offering rental guaranteed programs are forecast to no longer be the optimal product line. In contrast, straightforward property products with the potential for value appreciation and clear-cut ownership are signaling a return.
“Customers are looking forward to better quality and transparent products in Danang in 2019. Investors also expect more urbanizing developments in Danang rather than just hospitality products,” said Duong Duc Hien, director in charge of residential sales, north and central Vietnam at Savills Hanoi.
In HCMC, there is great potential for luxury residential projects. In fact, the demand for penthouses or million-dollar villas has escalated over the previous period. Savills said that it has found it challenging to meet the demand in the high-end residential segment.
In addition to high expectations in terms of location, exclusive designs, the ideal living environment, comfortable living spaces, privacy and security, the prestige of the developer and high-end furniture, the luxury residential product must match the taste of its owner. However, there is limited supply in the sector.
“The average price in this sector in HCMC is relatively lower compared with other markets such as Singapore, Hong Kong, Bangkok, Tokyo and Taipei,” said Nguyen Khanh Duy, director of the residential sales division at Savills HCMC.
The number of foreign and local investors keen on the city’s residential real estate market has risen tremendously in recent years due to the growing middle class/economy, the increase in reputable developers entering the market and loosened housing regulations making the purchasing process easier for foreigners.
However, Savills saw a considerable decline in new products launched last year, compared with 2017, which is easing some concerns over an oversupply on the market. In addition, with the lack of available land and new construction in core areas of HCMC and the city government’s decision not to approve any new construction permits in District 1 until 2020, the price for newly built homes in these districts is at an all-time high.
Investors buying into these districts anticipate lowering their investment risk as they view the overall location as very stable. As such, nearby districts, such as Districts 2, 4, 7 and 9, are benefiting the most, as demand remains strong.
The firm said that investors are still confident in Vietnam as a potential alternative investment destination based on its attractive entry price, potential for capital appreciation and attractive rental yields.
