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Apartments in HCM City: prices continue to fall as supplies keep increasing
Survey of Colliers International showed that luxury apartment selling prices in HCM City in the first quarter of 2012 saw the strongest decline of 40% per year while the prices of low and medium class apartments declined 27-30% on year.
Apartments see strong discounts
Colliers International consulting firm has recently announced real estate market research report in HCM City in Q1/2012. Accordingly the prices of apartments, rental charge of retail space and office rental charge in HCM City have declined in the quarter.
Specifically, the market saw a drop in price on all grades. In particular, the asking price at the luxury apartment segment decreased 40% compared to last year and the popular and middle class segment decreased from 27-30%.
In Q1/2012, the average decline was about 6% from the previous quarter. Some projects saw strong declines such as IPH or Star City (about 11%) or even some projects decreased up to 30%.
Most transactions in the market were for popular and medium class apartments with the price range around 11-22 million dong per square meter. New projects have been offering relatively attractive price levels.
The current supply of apartments is estimated at about 119,000 units, rising 37% over the same period last year. In Q1/2012 alone, there were about 2,000 new apartments being put up for sale in the market.
According to the statistics of this consulting firm, in 2012-2015 period, HCM City's market will receive a new supply of about 45,000 units from more than 90 projects, mainly in districts of Nha Be, Binh Chanh, district 2, 7 and 9 with about 65% of the market share.
Retail space to suffer from high pressure in price and rent capacity
HCM City now has about 646,000 m2 of retail space and the rental charge in the quarter was estimated to fall by 4% from the previous quarter. Meanwhile, the rent capacity saw a relatively fall of averagely 86%.
In addition, a strong increase of new supply in the coming time from new projects such as Saigon One, Eden A, Pico –Saigon Plaza, Kenton, Saigon M&C and Riviera Point is estimated at about 1.7 million m2 of floor area.
Therefore, the rent capacity and rental charge of retail space in HCM City is forecasted to keep falling in 2012 when the economy is predicted to be hard to thrive.
For office for lease segment, the rental charge also posted a fall of up to 7.4% and the average rental charge of office Grade A in Q1 was estimated to reach about $36/m2/month, down 7% from the same period last year.
In 2012, some projects are estimated to provide office area of about 147,000 m2 floor area such as Times Square, M&C Building and Eden A. The pressure in rental charge will tend to fall in the coming quarters.
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