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REAL ESTATE MARKET POSITIVELY AFFECTING INVESTOR CONFIDENCE
Hanoi's real estate market rebounds strongly
According to the statistics of Savills Vietnam, the total number of apartments in Hanoi is about 104,300 units, from182 sold projects and 65 active projects.
Total primary stock fell about 9 percent, while the total secondary stock increased about 5 percent on a quarterly basis. New launches continued with 6 new projects providing 2,900 units, the highest figure since the second quarter of 2013.
In the fourth quarter of 2014, the number of sold units continued to be maintained at a high level. The absorption rate reached 38 percent, similar to the third quarter, 2014. The average primary price increased 0.3 percent on a quarterly basis. Eight districts increased an average of 14 percent on a quarterly basis, while 4 others decreased by an average of 14.5 percent.
Meanwhile, the price of the secondary apartment increased about one percent and those of other districts increased to 4.7 percent while the prices of some properties decreased by 2.3 percent on a quarterly basis.
According to Savills Vietnam, the real estate market of Hanoi in 2015 is expected to grow strongly; however, it still suffers negative impacts from an increasing number of investment activities.
It is forecast that by the end of 2016, the market of Hanoi will receive an additional 14,200 apartments from 25 new projects. The amended Housing Law and Real Estate Business Law are about to increase the demand from foreigners and overseas Vietnamese.
According to Do Thu Hang, Head of Research and Consultancy of Savills Vietnam, the number of sold apartments has been increasing since the second quarter of 2014, while the inventory has been descending. The number of units sold in the second quarter is currently at its highest level since the second quarter, 2011. The number of sold apartments in 2014 reached the highest level since 2009.
In the fourth quarter, 2014, Grade C is still attractive, followed by Grade B. The number of units of Grade A sold has continued to increase since the first quarter, 2014. The main concept of "place-holding" in the real estate market in the fourth quarter, 2014 has replaced the "capital contribution" concept of the first sale agreement in a number of projects that enable customers to purchase the apartments flexibly.
Nguyen Hong Son, Head of Valuation and Financial Advisory of Savills Hanoi, said that with the recovery of the real estate market, the level of risk of investing in the real estate projects decreased. The real estate market will continue its recovery in 2015 and it is expected to grow significantly in the residential sector; additionally, there will be more investors in the sector when the Housing Law takes effect.
Grade B grows strongly in HCM City
According to the report by Savills Vietnam on the Ho Chi Minh City real estate market, the city has 11 new projects and three existing projects offering more than 4,700 apartments, up 3 percent compared to the previous quarter; and up to 130 percent compared to 2013. This is considered the most impressive growth of Ho Chi Minh City since the second quarter, 2011.
According to the statistics of Savills Vietnam, by the fourth quarter, 2014, the primary market has about 19,000 apartments, up 9 percent compared to the third quarter and 21 percent compared to 2013.
The absorption rate of the market reached 22 percent, up 3 percent on a quarterly basis and 11 percent per year. In the fourth quarter of 2014, about 4,200 apartments were sold, up 28 percent on a quarterly basis and 149 percent per year; the highest trading volume since the fourth quarter, 2010.
In the fourth quarter, 2014, District 2 and District 7 maintained the highest sales with 45 percent market share, followed by Tan Phu, Thu Duc, Binh Thanh, Binh Tan and District 12 with 38 percent of market share.
Apartments of Grade B had the strongest performance for the past 5 years, accounting for 46 percent of the total apartments traded.
According to the analysis of the Savills, in recent times, both end-users and investors can benefit from the stimulus package, flexible payment terms and competitive home loan interest rates. Besides, the quality of service of apartment interests investors and home buyers because they have more choices with their money.
According to Savills Vietnam, the real estate market from 2015 to 2017, Ho Chi Minh City will receive approximately 65,600 apartments from 102 existing and future projects, of which about 30 percent is expected to be completed between 2015 and 2016.
Source: VCCI
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