Hanoi’s condo market booming

April 05, 2018 | 11:06
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Positive market sentiments in the condominium industry in 2017 continued into the first quarter of 2018, according to CBRE Vietnam’s Hanoi property market report for the first quarter (Q1) of this year, released in Hanoi on Tuesday.
ha nois condo market booming
Positive market sentiments in the condominium industry in 2017 continued into the first quarter of 2018. - Photo baoxaydung.com.vn

Reviewing overall sales, 6,600 units were recorded as sold during Q1, up 5 per cent year-on-year (y-o-y). Of note, some projects by foreign developers are actively promoted in international markets, such as Singapore and Hong Kong, which helped boost sales performances.

Meanwhile, in the domestic market buyers are showing greater concern about building safety after an earlier condominium fire in Ho Chi Minh City. Safety has now become a first priority for buyers who are considering purchasing in a condominium project.

Nguyen Hoai An, director of Professional Services at CBRE Vietnam’s Hanoi branch, said at a press conference when releasing the report that the condominium fire is likely to affect the psychology of buyers, because this was not the first apartment fire but, perhaps, it caused the greatest fire damage ever to occur in the country.

“However, for large cities, the condominium is a category of economic property. So we expect that buyers will continue to consider purchasing condominiums. Though when deciding to buy a condominium, they will pay special attention to technical issues and security systems, along with conveniences and services that condominium projects have,” An said.

Meanwhile, investors of condominium projects will focus on the systems used in building the projects to ensure minimum security for residents, while attracting more buyers.

In this quarter, there was also a tendency that foreign buyers have shown more interest in the real estate market in Hanoi, An said. That trend appeared in Ho Chi Minh City several years ago.

The number of foreigners living in Hanoi has increased due to the surge in foreign direct investment (FDI) projects in Hanoi, as well as in the northern region in the first quarter.

In addition, property companies have begun advertising their condominiums in foreign countries.

With advantages in price and the leasing capacity of condominiums in Hanoi, foreigners will be more interested in those condominiums and traders will increase the number of buyers in the future, she said. In particular, with the diversification of condominium products, foreigners will have more choices about the type and location of those properties in Hanoi.

According to the CBRE report, during the reviewed quarter there were 8,800 new units launched from 39 projects, a 4 per cent decrease, as compared to Q1 2017. Notably, the mid-end segment continued its expansion, supplying nearly three quarters of all new launches.

In terms of pricing, the average selling price from developers in Q1 was recorded at US$1,339 per sq.m, down 0.4 per cent quarter-on-quarter (q-o-q), though this was an increase of 0.6 per cent y-o-y. There were also slight adjustments up and down from 1-2 per cent across different market segments during this quarter. In general, new units from follow-on launches see little change in pricing, in comparison with previous launches.

Meanwhile, new projects were launched at competitive pricing levels and with promotions that seek to draw market attention. In 2018, a new supply is expected to expand to locations farther from the current central business districts (CBD), yet offering convenient connectivity.

In terms of sales performance, CBRE forecasts that absorption will increase by 9 per cent y-o-y to 28,000 units, focusing on the mid-end segment. CBRE predicts that investors will continue to favour upscale projects in the core districts due to their promising rental yield potential. Meanwhile, end-users are paying more attention to safety matters, quality of the properties and access to nearby amenities.


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