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Hanoi’s property market cools
Some sectors of the real estate market in Vietnam’s capital have cooled recently as a result of a global economic slowdown, the country’s high inflation and high interest rates.
The city’s office, residential, serviced apartment, hotels and industrial park sectors experienced a slowdown in the second quarter of the year, Marc Townsend, managing director of real estate service firm CB Richard Ellis (Vietnam) Co., told a press briefing Thursday.
The recent lack of liquidity in Vietnam had most severely impacted Vietnamese real estate developers who needed construction loans, as well as Vietnamese home buyers seeking mortgages, he said.
The rapid escalation of construction, finance and land costs had affected the feasibility of new construction projects, Townsend added.
On the residential side, a contraction in prices was expected in the short term, with many home buyers taking a “wait and see” approach, he said.
Land and residential sale prices in Hanoi fell between April and June, he said.
Capital values for central locations fell slightly from the first quarter, while projects in the initial development stages and in remote locations had proved the most vulnerable, losing up to 15 percent of their capital value.
Construction delays resulting from increased materials and labor costs, as well as difficult financing conditions, were expected to slow the introduction of new stock into the market.
In the office sector, little new Grade A and Grade B office space was released in the second quarter of 2008.
Monthly rents for Grade A and Grade B spaces averaged US$51 and $35 per square meter respectively, increases of 9.8 percent and 11 percent over the previous quarter.
The occupancy rate for Grade A and B office space remained at 98-99 percent.
Monthly average rents in Hanoi’s major shopping centers remained stable at $65 per square meter in the second quarter, unchanged from the first quarter.
Meanwhile, demand for serviced apartments, mainly from expatriates, was lower than anticipated, with companies more price sensitive because of the global economic downturn, he said.
The most popular serviced apartment projects in prime areas still had occupancy rates of 95-100 percent and expected to maintain their low vacancy rate, he said.
Demand for hotels was unchanged in the second quarter from the first quarter, with an occupancy rate of 70 percent, Townsend said.
The average daily room rate for five-star hotels reached $158 in the second quarter of 2008.
Townsend said the outlook for Hanoi’s real estate market was positive, with improved economic indicators likely to boost the market.
Thanhnien
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