Poor demand around Tet strikes apartment market segment in Q1
The first quarter of the year saw a fall in both supplies and sales of apartments in HCMC, at 57% and 52%, respectively, over the same period last year, a report by property service provider Savills said, ascribing the decline to the long Tet holiday in February.
According to Savills’ report on the performance of the real estate sector in HCMC in the first three months of the year, some 12,000 apartments were put up for sale, with 6,400 of them being sold, a respective contraction of 34% and 42% over the previous quarter.
Savills attributed the drop to the nine-day Tet holiday. Further, construction at some apartment building projects has been suspended due to inspections, leading to a shrinkage of home supplies.
DKRA, another real estate service firm, has also released a report on the sector’s performance in quarter one, showing the same view as Savills. Both supplies and sales of apartments dipped to their lowest levels since 2016.
Meanwhile, the supply of low-cost apartments accounted for 85% of the total. These projects are mainly developed in outlying districts, such as 8 and 9. DKRA explained that construction of medium- and high-end condo projects in the downtown area have also been put on hold.
Despite the plunge in the supplies and sales, the prices of apartments in all segments surged. According to Savills’ report, the average price of medium-end apartments was US$1,390 per square meter in the first quarter, down 2% over the last quarter of 2018, but up 8% against the year-ago period.
High-end apartment prices soared to new highs last quarter. The highest price of luxury apartments in District 1 reached VND334 million (nearly US$14,400) per square meter, up 52% versus the highest price last year (VND220 million) and doubling the highest price of those in districts 2, 9 and Thu Duc, said Nguyen Hoang, director of Research and Development at DKRA Vietnam.
He added that prices of high-end apartments in HCMC will be soon equal to those in Thailand and Malaysia.
DKRA’s report also showed that there were three high-end apartment building projects launched last quarter: Park Legend in Tan Binh District, and Alpha King and The Grand Manhattan in District 1, making up 19% of high-end home supplies.
According to another property service provider, CB Richard Ellis Vietnam, high prices sent the average apartment price last quarter rising to US$1,709 per square meter, up 6% over the previous quarter and 10% over the same period last year.