HCM City housing market performed strongly in Q4

Thursday, Jan 08, 2015 17:50

HCM City urban developments. The housing market in the southern city performed strongly during Q4/2014. — File photo

HCM CITY (Biz Hub) — The housing market in this southern city performed strongly during the fourth quarter of last year, according to a Savills Viet Nam report released on January 8.

The total villa/townhouse transactions during the fourth quarter surged sharply by 56 per cent quarter-on-quarter, and the absorption rate for this segment was 37 per cent, up 3 percentage points from the previous quarter.

For the land plot segment, the total sales volume jumped significantly by 37 per cent quarter-on-quarter.

"The recently launched villa/townhouse projects with completed internal infrastructure, convenient accessibility and appropriate products, have contributed to the good performance of this segment," the report pointed out.

"Land plot projects that sold well were those with suitable pricing and financial support from developers and banks," it added.

As of the fourth quarter, the primary stock of villas and townhouses reached 990 dwellings, up 43 per cent quarter-on-quarter and 300 per cent year-on-year. The primary land plot market has more than 1,800 dwellings, reflecting a growth of 17 per cent quarter-on-quarter and 53 per cent year-on-year.

The future stock in the two segments is expected to provide more than 53,000 dwellings in 138 projects during the next eight years. During the next two quarters, 11 new projects are expected to enter the market, adding more than 1,100 dwellings.

The service apartment market achieved the highest occupancy rate in the fourth quarter over last year, at 83 per cent, growing by 1 percentage point quarter-on-quarter and 3 percentage points year-on-year.

The average rental rate remained unchanged quarter-over-quarter, but was down 2 per cent year-on-year, to VND489,000 (US$23.28) per square meter per month.

The total supply for this market was pegged at approximately 4,190 units, rising 1 per cent quarter-on-quarter and 7 per cent year-on-year.

The city's serviced apartments are in demand from expatriates and business travellers, with the total take-up expanding by 8 per cent per year from 2010 to 2014. Loyal long-term covenants, involving at least a six-month stay, still dominate this market and make up for 75 per cent of the total deeds.

Some 1,480 units in 11 future projects are expected to enter the market during the next three years. The market will also welcome four projects with 271 units in the next two quarters.

In the apartment-for-sale market, the overall absorption rate was 22 per cent, up 3 percentage points quarter-on-quarter and 11 percentage points year-on-year. In the fourth quarter, about 4,200 units were sold, up 28 per cent quarter-on-quarter and 149 per cent year-on-year, the highest transaction volume seen in four years.

Savills said new projects are coping with demand from end-users in a much better way, while the stable yield and good rental capacity in well-developed areas has also encouraged investors.

Both end-users and investors can also benefit from financial support, including flexible payment terms, competitive home loan interest rates and stimulus packages.

As of the fourth quarter, there were about 19,000 available units in the primary market, an increase of 9 per cent quarter-on-quarter and 21 per cent year-on-year.

From 2015 to 2017, about 65,600 units in 102 existing or future projects will enter the market. Approximately 30 per cent of the total future supply is expected to be completed this year and during the next year.

According to Savills, HCM City's hotel and office markets reported weaker performance, while retail market operations improved moderately during the last quarter. — VNS

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