Property supply expected to increase in H2
The supply of real estate products is expected to surge in the second half of the year but a market bubble is unlikely to form, according to general secretary of the Viet Nam Association of Property Brokers Nguyen Van Dinh.
Selling prices are unlikely to change much as demand remains high.
Dinh told a meeting earlier this week that supply and the number of transactions in the property market in the first six months of the year were reduced from the first half of last year. Decreasing supply in the second quarter was due to tightened credit policies in the real estate market.
“However, demand in the property market was high in the January-June period in the two big cities," he said. "The real estate prices therefore were slightly increased but not overly inflated."
Some property markets which saw strong development in recent years such as Da Nang, Nha Trang, Quang Ninh, Binh Duong and Dong Nai saw decreases in both new supply and the number of transactions.
New products were mainly in Ha Noi and HCM City in the second quarter. The capital city had more than 7,300 new apartments and 400 houses. Most of the new apartments were in the middle market segment with selling prices of VND25 to VND35 million per square metre. There were more than 4,200 successful transactions. Another 900 apartments were sold at prices of less than VND25 million per square metre in the second quarter of the year.
Statistics from the association showed that in the first half of the year, there were more than 50,000 property products offered on the market nationwide. Of which, 32,000 were sold.
The general secretary said some foreign investors appreciated the rate of consumption in Viet Nam’s real estate market. In Viet Nam, it takes 12 to 18 months on average to sell out a property project after it is offered for sale. Meanwhile, it often takes around five years in most foreign markets.
“This is why demand for housing in Viet Nam is huge," he said. "And why it is an attractive market for foreign investors."
HCM City condo market set for 2nd half revival
Vinhomes Grand Park in District 9 will be one of the key factors in the revival of the HCM City apartment market, which had slumped in the first half of 2019, analysts say.
In a series of reports on the city real estate market in the first half and forecasts for the future, most consultancies have identified this project as the likely market driver over the next few months.
CBRE Vietnam, in a report this week, said the second half of the year would see plenty of new supply in the East led by Vinhomes Grandpark in District 9 with over 10,000 units and five new projects in District 2.
Other areas also to become active are the west with AIO City, Akari City and D-Homme and the south with Lovera Vista and subsequent phases of Eco Green Saigon and Sunshine City Saigon.
Over 23,000 units will be launched during the half.
Jones Lang LaSalle made a similar prediction, saying in its first-half report: “Since the prevailing delay in the approval procedure is expected to continue, the projected supply pipeline in 2019 is subject to greater uncertainty and varies between 18,000 and 28,000 units, but the actual number heavily depends on the launching process of the large-scale Vinhomes Grand Park project.”
When asked by Viet Nam News, Vin Group, the developer of Vinhomes Grand Park, said over 2,000 visitors came to the transaction floor on the first day of the project’s launch earlier this month.
Le Thi Thu Trang, director of VI Property, one of 63 distributors of the project, said it was the most eagerly anticipated one in the market at a time when supply is limited.
Nearly 6,000 condos were sold in one day, she said.
The uptake particularly testified to the fact that though demand was huge in the market supply was modest, as the reports said.
CBRE said in the second quarter, due to tardy licensing since last year, new supply continued to drop, falling to the lowest level in the last five years. Only 4,124 units in 10 projects were launched, a 34 per cent decrease year-on-year, and the total new supply in the first half was 8,547.
During the quarter only two new projects held their first launches, The Marq in District 1 and The Signial in District 7, with the remaining eight only launching additional phases, CBRE said.
The Government’s tight control over new developments has forced supply onto a more sustainable path.
Only projects with land use rights approval and construction permits can sell to the public.