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HCMC apartment market beginning to stir: Report
In the Ho Chi Minh City property market, the apartment for sale segment saw both supply and demand rise in the third quarter, consultancy Savills Vietnam said in its quarterly report.
The supply of new apartments reached a record 16,600 units by the end of September, nearly triple the number from a year earlier.
Nearly 7,200 came into the market in the third quarter against 3,200 in the second and 2,900 in Q1.
The grade C segment saw the highest number of new projects, with the majority of them located in Tan Phu, Binh Chanh, and Binh Tan Districts.
The third quarter also saw the highest number of apartments sold in the primary market this year - at approximately 4,400 units, they were equal to the cumulative number in the previous two quarters.
The majority of them, around 80 percent, were grade C units. Demand was mainly in the segment priced below US$1,000 per square meter, which saw sales of nearly 3,300 units.
Rising demand for apartments was fuelled by increasing disposable incomes and growing migration to the city.
The demand is expected to remain strong in the lower-cost segment where units cost VND800 million to VND1.5 billion ($42,000 – $79,000).
A further 26 apartment projects are expected to launch in the next two quarters, offering around 10,000 units.
In the next two years 104,000 new units will be built and put for sale.
Serviced apartments
There were around 2,950 serviced apartments of all grades for lease in the city, up 6 percent quarter on quarter.
Districts 1 and 3 alone accounted for 62 percent of them, with District 1 ranking first with 1,500 units.
With no new projects completed in Q3, the primary market remained unchanged at eight projects and approximately 800 units.
Almost 490 villas and houses were sold. The price of villa land ranged from $1,500 to $2,500 per square meter on average.
The Phu My Hung New Urban Area in District 7 accounted for 70 percent of the villas and houses that came into the secondary market and they sold at an average price of $600,000 – $2.8 million. HCMC’s population growth averages 3.5 percent a year, double the national rate.
With many projects being in the planning stage or awaiting licenses, the market is expected to add at least 9,500 villas and townhouses in the next few years, most in outlying districts like 9, Can Gio, Binh Chanh, Binh Tan, and Hoc Mon.
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District 9 is likely to rank first in terms of total area of units and number of projects.
Between 2004 and 2009 around 1.6 million people migrated to the country’s southeastern region, with a million coming to HCMC alone, Savills said.
HCMC downtown still gold mine
Though becoming increasingly congested, District 1 and its neighbors District 7 and District 2 are still attractive to investors.
In the hotel segment, nearly 83 percent of future supply will be in District 1, concentrated in this district near the main tourist and business areas.
More than half of the 100,000 square meters of office space that will come into the market by year-end will be in District 1 buildings like Bitexco Financial Tower (37,000 square meters) and HMTC-Savico building (15,500 sq.m).
In the medium term, around 900,000 sq.m out of 1.2 million square meters will be supply in districts 1, 2 and 7.
In the retail segment, Districts 1 and 7 will account for 54 percent of the 700,000 sq.m of new supply by 2012.
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