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Demand for apartments expected to remain high
Real estate services providers believe demand for apartments will remain high in both Ha Noi and HCM City despite difficulties because of factors like access to bank loans and prices that are quite a bit lower than their peak in early 2008.
Marc Townsend, Managing Director of property consultant CBRE, said the market was also supported by fewer white-collar lay-offs than feared due to the economic crisis and discounts and other promotions offered by property developers.
Buyers of Sky Garden 3 apartments in Phu My Hung, for instance, can get a 20-year home loan of up to 90 per cent of the cost from Bao Viet Bank thanks to an agreement between the bank and the developer Phu My Hung Corp.
Another property consultant, Savills, cited the modest per capita housing space of seven square metres in the capital.
"The limited supply in the apartment-for-sale sector in Ha Noi may not be adequately addressed over the medium term, owing to the present market," its Managing Director Brett Ashton said, warning also about possible delays and cancellations in projects.
Districts 2 and 7 are the most exciting markets thanks to brand-name developers in District 7 and promising infrastructure projects linking the area to the CBD in District 2.
Developments featuring affordable apartments will prove more successful and sustainable in the coming years, according to the industry.
Efforts by the Government to develop low-income housing would give a helping hand to this sector, insiders said.
The serviced apartment sector has seen a dip in growth, with quarter-on-quarter occupancy rates going down a per cent to 88 per cent in Ha Noi in the first three months. It is anticipated that fewer international companies will be willing to hire high-end units for staff, but exploring affordable solutions like buying apartments.
No new supply came into the market, which remained almost unchanged at 2,100 units with a combined area of 207,000sq.m in 41 serviced apartment buildings.
Savills said the supply in the capital's CBD is likely to remain restricted for several years with no major developments planned. In HCM City, two high-end projects, Kumho Asiana and Crescent, expected to join the market this year, will make it more competitive.
Office for lease
The economic storm has left no place unaffected, including the office sector. Occupancy rates in both HCM City and Ha Noi declined more than 3 per cent from the fourth quarter of 2008 to 88 per cent this year.
The average rent in the capital saw a fall of 11 per cent, or nearly US$4 per sq.m a month.
In HCM City, the average rent fell to about $33 from $42 per sq.m a month. Though there was no new supply in Grade A, rents fell 19 per cent. Demand for Grade B space has increased since more Grade A tenants are considering a move to Grade B buildings.
According to Savills, HCM City may get an additional 960,000sq.m, or 150 per cent of existing space, in the next four years, with projects like Kumho Asiana Plaza, Crescent and Centec Tower to be available this year. The figure for in Ha Noi is likely to be more than 1.1 million sq.m by 2012.
Overall demand for new office space of all grades would come down throughout this year and potentially in 2010, it said.
Fewer guests
No new hotels opened in Ha Noi or HCM City, except Movenpick, formerly Guoman, which reopened in March after upgrading from a four-star to a five-star hotel.
Revenue per room reduced significantly due to low occupancy rates, also caused by the global recession. It was $64.9 for four -and five-star hotels in Ha Noi, a fall of 31 per cent from the fourth quarter of 2008. It was $66 in HCM City, a fall of 18 per cent.
More than 992,000 international visitors came to Viet Nam in the first quarter, down 16 per cent from the same period last year. The ongoing Impressive Vietnam Campaign by the Viet Nam Administration of Tourism is expected to help the country attract 4.5 million visitors this year.
vietnamnet, vietnamplus
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