Falling home prices create buyer's market

In the second quarter, the Savills Property Price Index (SPPI) for Hanoi residential area was 104.7, dropping 3.6 points quarter-on-quarter and down 17.7 points year-on-year.

The index has decreased for eight consecutive quarters by roughly 25 percent since its peak at 138.7 in the second quarter of 2011.

The inventory ratio decreased two percentage points, reaching 93 percent. "It is a good sign for the overall improvement of the market's performance," the company said.

The average apartment price has decreased 30 percent in the last two years due to the entrance of new projects and price reductions.

In HCM City, the residential price index stood at 89.4 in the second quarter, with a slight increase of 0.2 points quarter-on-quarter, but decreased by 3 points year-on-year.

The absorption rate increased one percentage point quarter-on-quarter and two percentage points year-on-year to 8 percent.

The number of transacted units surged 59 percent year-on-year, and the volume has been on the upward trend for four consecutive quarters.

The increase of newly launched apartments with lower selling prices led to the decrease in the average market price by 21 percent in four years since 2009.

Savills noted that the residential price index had gradually climbed up since the bottom of the second quarter last year.

"Thanks to flexible prices, better product mix and Government policies such as lowered interest rates, the confidence of home buyers rose indirectly. The substantial year-on-year increase in transaction volume is a sign that the market is recovering," the company said.

Meanwhile, in the office sector, the SPPI for Hanoi dropped 12 points year-on-year to reach 56 in the second quarter. The office index stood at 71, down 4.2 points over the same period last year.