A view of MBLand Central Point My Dinh (MBland Home 3) project which is under construction in Ha Noi's Tu Liem District. New apartments and houses were expected to reach about 10,000 units in the last quarter, with subsequent launches from existing projects responsible for 50-60 per cent.— VNS Photo Doan Tung

HA NOI (Biz Hub) – Sales of mid-range apartments in Ha Noi increased during the third quarter, a leading real-estate firm has reported.

The third-quarter report by CB Richard Ellis Viet Nam Ltd Co (CBRE Viet Nam) says more than 6,800 new units were launched from 16 projects, a quarter-on-quarter increase of 14 per cent, but a decrease of 38 per cent year-on-year.

Mid-range products still dominated the new launches, although new supply from high-end and luxury apartments also increased significantly, the report said.

In particular, around 3,000 apartments from these segments were launched this quarter, accounting for 45 per cent of total new launches.

Overall, the third quarter experienced a positive market sentiment, as sales caught up fast with new launches. A total of 5,279 units were sold, an increase of 52 per cent compared to the last quarter.

The report said sales also maintained an upward trend since the beginning of this year in the high-end segment.

In the first three quarters of 2016, approximately 14,200 units were sold, with mid-range apartments making up nearly 50 per cent of this figure, CBRE Viet Nam said.

Another leading real estate firm, Savills Viet Nam, also said mid-range apartments recorded the highest primary sales volume for the 6th consecutive quarter, totaling 51 per cent of sales. The absorption rate decreased two percentage points q-o-q to 33 per cent but the average asking price was stable, it said.

Meanwhile, a report by the Rong Bay Real Estate Trading Floor said that in general, the domestic property market would remain stable this year-end and early next year.

If, in the coming time, the State issues new policies encouraging people to buy property, the local real estate market would see stronger growth, this report said, noting that it was a good time for buyers because of high supply, stable prices and many preferential offers from sellers.

Western attractions

The report said that in Ha Noi, the western region would be "hot" and experience strong growth because of many advantages in infrastructure in the area, as also Ha Dong District.

Large property investment firms like Vingroup, FLC and Bitexco have many projects in the area.

The trading floor expects that the western region will provide 70 per cent of the apartment supply for capital city market, with selling prices increasing by 7 per cent in the near future.

Demand for apartments and house was still high, so property transactions in "good projects" will continue to rise, said Nguyen Van Tuan, CEO of Rong Bay Real Estate Trading Floor.

He reiterated that the region's developed infrastructure would attract both home-buyers and property investors.

Home-buyers are likely to choose this region because it is convenient to live, study and work here, while investors will see it as a safe investment destination with potential for higher profits, he said.

Dominant supply

In its quarterly report on Ha Noi, Jones Lang LaSalle Việt Nam Ltd Co (JLL Viet Nam) said more than 11,000 new completions were expected in the last quarter of 2016, nearly 70 per cent of which would be in the mid-range segment.

It estimated new supply for the last quarter at 10,000 units, with 50-60 per cent of the launches coming from existing projects.

The company said apartment sales would also rise to new highs following expected increases in supply and greater interest among both owner-occupiers and investors. Prices would continue rising because of new launches and improved conditions, it said.

Asian investors

Real estate attracted the second largest volume of foreign direct investment with 34 new projects worth US$1 billion in the first nine months of this year, or 6.1 percent of the total, according to the Ministry of Planning and Investment's Overseas Investment Agency. 

Nguyen Hoai An, CBRE Viet Nam Director of Research, Consulting and Asset Management Services, said Viet Nam had been extremely attractive to Asian investors over the last decade, especially those from Japan, the Republic of Korea and Singapore. 

These investors consider market potential, penetration opportunity and capital safety when deciding to invest in any overseas property market, she said. 

Japanese investors have shifted their interest from industrial properties to housing and offices over the past two years. They tend to buy up existing projects or start new ones from scratch, she added. 

Another perspective came from real estate services provider Savills Viet Nam, which said it was not just residential housing and commercial office buildings that had picked up.

Industrial real estate had also become valuable, it said, pointing out that rising labour costs in China was putting pressure on labour-intensive industries like garment, footwear and mechanical engineering.

As a result, foreign firms seeking better manufacturing conditions, especially in labour costs, were leaving the country. 

Viet Nam was emerging as a bright spot for this investment thanks to its waterway and road connectivity with China, it said.

The country's membership in ASEAN and a number of free trade agreements has attracted a surging amount of FDI, especially since the conclusion of negotiations on the Trans-Pacific Partnership and the EU-Vietnam Free Trade Agreement in late 2015, it added. — VNS