Real estate grows in Ha Noi and HCM

Wednesday, Oct 08, 2014 18:39

Visitors are introduced about an apartment building project. Ha Noi and HCM City saw significant improvement in the property market in Q3. — Photo

HA NOI (Biz Hub) ─ Viet Nam's two largest cities witnessed significant improvement in apartment, office and retail markets in the third quarter of 2014, according to Savills Viet Nam's latest reports.

In the capital city, the total number of apartments for sale included 100,700 units from 171 sold projects and 67 active projects. Strong numbers for Grade B and C projects increased apartment sales market-wide by 58 per cent quarter-on-quarter, and the absorption rate was 38 per cent, a 15-percentage points increase quarter-on-quarter.

The 45,000-square meter Lotte Center Hanoi entered the market, increasing the total supply of serviced apartments to 3,430 units, a gain of eight per cent quarter-on-quarter and 19 per cent year-on-year.

The average rent for serviced apartments increased by three per cent quarter-on-quarter but decreased by two per cent year-on-year to VND549,000 (US$26) per square meter per month, while occupancy rate fell by four percentage points quarter-on-quarter to 75 per cent.

Office supply increased by three per cent quarter-on-quarter and 20 per cent year-on-year after Lotte Center Hanoi came online, and the average rent increased by 1.9 per cent after 12 consecutive quarters of decrease.

Total retail space also increased by 2.2 per cent quarter-on-quarter and 22 per cent year-on-year, with new projects entering the market in Hoan Kiem and Ba Dinh districts. The average rent decreased by 6.2 per cent quarter-on-quarter and 15.2 per cent year-on-year.

Retail occupancy increased six percentage points quarter-on-quarter but decreased two percentage points year-on-year to 83 per cent, with the central business district showing negative take-up due to two floors of Trang Tien Plaza closing for restructuring.

In HCM City's apartment-for-sale market, a total of 10 new projects and new phases in four active projects were launched in the third quarter, adding more than 4,600 units, a 19-per cent quarter-on-quarter and 103-per cent year-on-year increase. This was the highest newly-launched supply in one quarter since the second quarter of 2011.

About 3,280 units were sold, a 29-per cent quarter-on-quarter and 85-per cent year-on-year increase, the highest transaction volume since the fourth quarter of 2010. Low and competitive mortgage rates, flexible payment terms and eased restrictions on the disbursement of the US$1.44-billion stimulus package helped to boost buyer confidence.

The rental yield for the apartment market was stable at four to six per cent in recent quarters, and this also stimulated investors in this area.

In the office market, the southern city had a total space of 1.45 million square meters from 220 projects as of the third quarter of 2014, with an average rental rate reaching VND536,000 ($25) per square meter per month. Average occupancy was 91 per cent, the highest rate in the last five years, due to notable improvements in all grades of office.

The HCM City retail market also performed better with a four-percentage point quarter-on-quarter increase and two-per cent quarter-on-quarter increase in average rent.

Retail sales here reached VND476 trillion ($2.67 billion) in the first nine months of 2014, and without inflation, these increased by 7.4 per cent year-on-year, which was higher than the national average growth of 6.4 per cent.

While 70 per cent of the city's population is active in the workforce, there have been steady improvements in middle class living standards, Savills said, noting that many international retailers would enter Viet Nam following World Trade Organisation commitments. — VNS

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