Apartment market sees green shoots of recovery

Times City Hanoi

At the end of May, Vingroup announced its second phase of Times City Hanoi was up for sale at starting price of VND1.9 billion ($90,000) per unit with numerous incentives and financing options.

In just two days, nearly 600 units were sold. This reveals that market demand exists for the right products and Vingroup was timely in putting the units up for sale.

Developer FLC made a market splash last week when it announced it would sell units in its tower at 36 Pham Hung street for VND23 million ($1,050) per square metre, compared to the roughly VND30 million ($1,400) per square metre for neighbouring projects.

Many projects are reporting solid sales, such as Thang Long Number One, Discovery Complex and Royal City.

In Ho Chi Minh City as well, a range of projects are experiencing rocketing sales such as 8X Thai An, Hung Ngan Garden, Sunview Town and 4S Linh Dong.

According to Savills Vietnam, the apartment market overall has seen an upswing in terms of both liquidity and price.

In the second quarter of this year, approximately 1,900 units were sold in Hanoi, up 54 per cent on-quarter thanks to strong sales of Grade B projects. rding to Savills, projects with good construction progress and strong development credibility generated good sales this quarter. Most buyers were end-users who expected real products.

From the third quarter onward, 83 projects with more than 65,800 apartments are slated to start construction in Hanoi. But 50 per cent of those are still in the planning stages. The second half of 2014 will welcome approximately 5,000 units from nine projects, and more than 4,900 apartments from five projects are expected to launch in 2015.

Meanwhile, in Ho Chi Minh City, Savills reported that the overall absorption rate was 17 per cent, up 7 per cent on-quarter and 9 per cent on-year.

“The number of transactions in the second quarter was approximately 2,500 units, up a notable 60 per cent on-quarter and 115 per cent on-year. Grade C accounted for nearly 70 per cent of transaction volume, which was the highest in the last three years in the southern market,” reported Savills.  In the second quarter, Ho Chi Minh City’s districts 2 and 7 continued to see the highest transaction volume, accounting for 46 per cent of total sales, followed by Go Vap, Tan Phu, Binh Tan, and Thu Duc, with 34 per cent.

“Competitive mortgage rates helped support buyers and strengthen residential demand. Flexible payment terms in a number of Grade B and C projects also encouraged buyer confidence,” Savills noted.