Condo market inches up in second quarter

29 Jun
Vnre.blogspot.comAn increase in the number of transactions in the second quarter has made for a positive sentiment in the local property market, after it went through the first quarter of this year with a decrease in trading activity in land-lots and apartments.
Unlike the Hanoi market, which witnessed land-lot fever in April and May, cooling from early this month, the property market in HCMC was quieter, but apartment transactions recorded a significant increase, especially in more affordable apartments, which continued to dominate the market.

Guy Major, director of sales of Savills Vietnam, has given the Daily a quick review of the HCMC condo market, saying the second quarter saw a 24% increase in supply and 26% increase in absorption rate. Three thousand one hundred apartments came on to the market and 2,200 were sold in the second quarter of this year.

“We witnessed steady deal-flow in the second quarter, and, with some exciting, competitively priced, exclusive new projects to be launched in the next few months, we are expecting to be very busy,” Major says.

According to Savills, affordable apartments continued to dominate the market, accounting for 73% of the 2,200 apartments absorbed by the market in the second quarter.

Observing the market over the past year, some property experts say the apartment market has been stable in price, not increasing and not falling sharply. Most projects launched recently offered apartments with prices ranging from VND12 million to VND15 million per square meter.

Among the projects, Dat Gia Real Estate Company has launched a condo project named Babylon Residence 1, in Cay Keo Street, Tam Phu Ward, in the fringe district of Thu Duc. Two blocks of 21 stories in the condo will provide the market 688 apartments of from 75 to 240 square meters with prices starting around VND14 million to VND15 million per square meter.

Last week, Dat Xanh Real Estate Construction and Services put its Phu Gia Hung Apartment project at 15 Ward in Go Vap District on a marketing program. Two blocks of 14 stories will supply the market 234 apartments of from 52 to 93 square meters, with prices starting from VND13 million per square meter.

In another project, Viet Au Corporation plans to launch 600 apartments in its Lotus Garden in Trinh Dinh Thao Street, in HCMC’s Tan Phu District, in the next quarter. The developer has not yet announced the selling prices, but it says its apartments’ selling prices will range from VND13 million to VND15 million per square meter.

Speaking at a seminar at Sofitel Saigon Plaza in downtown HCMC last week, Le Tham Duong, head of the business-management faculty of the HCMC University of Banking, commented on the trend of affordable project development, saying the market demand was driving developers to adjust their products to join the race.

The recent difficulty helped separate segments in the market, in which Grade C apartments take a major share because of huge demand.

Do Thi Loan, general secretary of the HCMC Real Estate Association, says the HCMC expansion plan will offer opportunities for developers and homebuyers in the years to come. Under the plan, districts including 2, 7, 9, 12, Thu Duc, Binh Tan and Tan Phu will be attached to other existing districts.

Loan says homebuyers cannot find any affordable condo projects in the central business districts, but they can in the developing districts where there are land-lots for low-cost condo development.

Transport will be more convenient in the future, because infrastructure development shortening the distance from fringe districts to the city center is under construction. The East-West Highway, Ben Thanh-Suoi Tien Metro, HCMC-Trung Luong Highway and Thu Thiem Tunnel are among the infrastructure projects that will facilitate traffic from the outlying districts to the city center.

Savills anticipates more supply and more demand in the next quarter, and it forecasts transaction levels even further dominated by Grade C apartments; demand levels are high, at the right price.

Source: The Saigon Times

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