Ho Chi Minh City apartments rebounded at the end of 2021, a positive signal of the real estate market
The Rivus Saigon – According to Savills Vietnam's Q4/2021 real estate market report, after experiencing a dismal Q3, HCMC's apartment market has been positive in terms of supply, demand and selling price in last quarter of the year.
Ho Chi Minh City apartments wake up at the end of the year
Specifically, about supply: According to Savill, the primary supply of apartments was abundant in the fourth quarter, because investors confidently returned to the market after many months of the epidemic. Primary supply reached nearly 7,820 units, the highest quarterly supply in 2021, increasing by 160% quarter-on-quarter but decreasing by 31% year-on-year.
New supply accounts for 72% of primary supply with more than 5,600 units from five new projects and subsequent phases of nine existing projects, of which Grade B apartments account for 75%.
According to this unit, since the end of 2019, the primary supply has fluctuated. New supply in Q4/2021 is significantly higher than over 350 units in Q3, but still down 33% YoY. Primary supply in 2021 reached nearly 11,700 units, the lowest level in the past 5 years and decreased by 54% year-on-year. Grade B accounts for 62% of primary supply, followed by Grade C with 31% market share.
In terms of absorption rate: The transaction volume in 2021 reached more than 9,430 units, down 58% year-on-year and the lowest level recorded since 2017. However, home buying demand is still positive when the absorption rate reaches 81%. Grade B led the transaction volume, accounting for 69% of total transactions and the absorption rate reached 90%. Low inventory has supported the absorption rate of new supply reaching 78% in 2021.
Particularly in the fourth quarter,
Apartment transactions reached nearly 5,600 units, an impressive increase compared to more than 400 units in Q3, but still decreased by 35% year-on-year. Grade B accounted for 75% of total transactions in Q4 and increased by 75% year-on-year. The volume of transactions from new supply accounted for 94% of total transactions in Q4 with the absorption rate reaching 91%. Absorption rate reached 85%, up 80 percentage points QoQ and 21 percentage points YoY.
Regarding the selling price, the primary price still tends to increase. Most of the projects did not change the selling price, except for 5 projects which increased the selling price to 11% QoQ due to high prices in the new opening stages or in the last apartments in projects with good construction progress. .
According to Savills, after the 3rd quarter, there was a slow performance, the construction sites have returned to operation and are rushing to construct to keep up with the handover schedule. To stimulate demand, investors have many preferential policies for buyers such as discounts, gift vouchers, or gifts for customers. There are also financial support policies such as loan support up to 70% apartment value, long-term payment policy, interest payment on the deposit amount or on a certain percentage of the selling price, or the program " Home-for-home” by Masteri Home.
It is difficult to find affordable apartments that meet a large amount of housing demand. Grade C projects have an average selling price in 2021 at a selling price of 56.5 million VND/m2, an increase of 27% year-on-year. In the fourth quarter of 2021, except for 1 project with a selling price of less than VND 30 million/m2 of clearance, Grade C projects have a selling price ranging from VND 37 to 60 million/m2 of clearance. Projects that improve the quality of development have a variety of local amenities, equipment and materials delivered from well-known suppliers, or are close to existing residential areas and public infrastructure.
Neighborhood apartment thrives
Binh Duong is becoming an area with an ideal supply of affordable apartments to replace Ho Chi Minh City. Ho Chi Minh City thanks to the advantage of being adjacent to Ho Chi Minh City, lower selling prices and high urbanization rate. In 2021, Binh Duong's primary supply is higher than HCMC's 5%, and transaction volume is higher than HCMC's 42%. The average selling price of apartments in Thuan An (Binh Duong) is 40.8 million VND/m2 in Di An is 37 million VND/m2 which is more attractive than the average selling price of Grade C apartments in Thu Duc (HCMC). is 41.8 million VND/m2.
According to Savills' forecast, the future supply until 2024 in Binh Duong is estimated at nearly 48,000 units, of which Thuan An and Di An account for 83% market share. The improvement of transport infrastructure such as the Ho Chi Minh City - Thu Dau Mot - Chon Thanh Expressway, the fast bus route connecting the city. New Binh Duong and District 9, and Metro Line 3B contribute to attracting buyers to Binh Duong.
By 2025, the future supply is expected to reach more than 145,500 units from 114 projects, of which 40% is coming from the next phases of existing projects. City. Thu Duc continues to lead the future supply with 46% market share. Grade B is expected to lead the market with 51% future supply, followed by Grade C project with 37% market share.
The positive performance of Q4/2021 encourages investors to open for sale. About 20,800 units from 43 projects are expected to be launched in 2022, of which domestic developers provide 93% market share. In the past 5 years, the annual new sales volume reached about 27,000 units, the average annual sales volume reached 33,000 units, and the average absorption rate reached 85% each year, indicating that the sales volume in 2022 may be possible. good absorption.
Regarding expectations for 2022,
Savills representative said that in 2021, the amount of remittances to Vietnam is estimated at USD12.5 billion, of which Ho Chi Minh City accounts for the largest amount with 30% market share. The amount of remittances poured into real estate is estimated at 20-22% in recent years. This is an attractive source of capital pouring into the real estate market.
According to FocusEconomic's report, Vietnam's GDP in 2022 is expected to increase by 7.2%, the highest rate in the region; inflation is expected to be controlled at 3.1% and home loan interest rates are not expected to increase. However, the joint stock commercial bank will reduce the capital poured into the real estate market from 29.7% in the first half of 2021 to 23.8% in the first half of 2022.
“After a quiet 2021, we see ample supply in the residential segments. Healthy demand thanks to rising equity capital and lack of alternative investments will support the rapid recovery of the housing market”, emphasized Mr. Vincent Nguyen, Director of Ho Chi Minh City Housing Sales Department. strong.
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