The number of sold units in Ho Chi Minh City in Q2 reached 5,887 units, down 45% YoY and 35% QoQ. This leads to concerns about the supply being so high that the volume of transactions cannot keep up with the new supply each quarter.
Consulting firm CBRE has just released the report on the real estate market in Ho Chi Minh City in the second quarter of 2016. Accordingly, the supply of apartments for sale continued to increase strongly, with a total of 10,107 new apartments, up 20% qoq but down 9% yoy. However, the new supply of the mid-end segment accounted for the highest proportion, about 41% of the total new supply. Next is the luxury segment with 22% of the total new supply, mainly from the Vinhomes Golden River project in the historic Ba Son area.
“After the official offering of the Vinhomes Golden River project, with the enthusiastic participation of about 5,000 sales staff, a clear decrease in the number of offers of high-quality luxury and high-end projects can be seen. good quality. The reason is that these investors have the mentality of waiting and observing the market's reaction. The Vinhomes Golden River project recorded positive business results, with sales equivalent to the total number of luxury apartments sold in the past eight years in Ho Chi Minh City,” said CBRE's report.
Also according to CBRE's statistics, in this quarter, the number of sold units reached 5,887 units, down 45% over the same period last year and down 35% compared to the previous quarter. Consumption rate reached 16% this quarter, or 17 percentage points lower than the same period last year and down 9 percentage points compared to the previous quarter. This leads to concerns about the supply being so high that the volume of transactions cannot keep up with the new supply each quarter.
CBRE's home business also recorded a strong shift from buyers to live in to buyers to rent out and buy to invest in the past 12 months. In addition, the number of apartments to be handed over in the next 18 months has an average growth rate of 200% per year, greatly affecting the ability and profit from sublease.
The second concern comes from recent legal disputes between project residents and investors when the investor uses the apartment they have purchased as collateral, or hands over the unfinished project area. or the land dispute between the landowner and the investor, etc. All of these bring a lot of risks to the buyer.
However, CBRE also believes that the positive point of the market lies in the mid-end segment. With high new supply, projects in the mid-end segment all recorded good business results, accounting for 37% of total market sales, the highest among segments. Again, this proves that buyers still prefer new products, the more new products the developer offers, the higher the potential for sales.
Feeling the quiet situation of the market, most developers reduced the asking price and this 2nd quarter recorded the average asking price to 2,009 USD/m2, which is 1% decrease compared to the same period last year and 0.3% qoq. The luxury segment, however, recorded a 2% increase in price, mainly from the Vinhomes Golden River project.
Looking at future prospects, Ms. Duong Thi Thuy Dung, Director of Research and Consulting, commented that: “CBRE expects the market to become active again in the second half of the year when investors are currently active in the market. plans to offer new projects, as a breath of fresh air to the market.”
“In which there are some notable projects such as phase 2 named Hawaii of Diamond Island Premier Residence project invested by Kusto Home; Empire City project invested by a joint venture between Tien Phuoc, Keppel Land, Gaw Capital and Tran Thai; Palm City project (District 2) invested by a joint venture between Tien Phuoc, Keppel Land and Tran Thai; Millennium project is jointly developed by Vinh Hoi Investment Company, Phat Dat and Thao Dien Investment Company (District 4) and Sunwah Pearl project (Binh Thanh District)", added Ms. Dung.
