Strong resurgence of luxury real estate in Ho Chi Minh City

After a long absence, the luxury real estate projects in the Ho Chi Minh City recognized signs of prosperity. However, as identified by some investors at the Congress III of Ho Chi Minh City real estate Association (HoREA), luxury and above housing segment will hardly achieve good liquidity levels after more than a year having successful business.

According to Mr. Le Hoang Chau, Chairman of HoREA, in 2016, real estate inventory still has about 31.842 billion, 19.047 billion decrease compared to 2015. In which, Ho Chi Minh City inventory has 5.954 billion left, down 4.153 billion. Real estate market continues to recover, though not as strong as in 2015, but some segments still show attraction.

Operating results of the HCM City real estate market in 2016 showed that the average class housing which occupies 79,7% remains the leading segment. In terms of prices, in 2016, the apartment price rose approximately 5%, land sales prices increased higher, approximately 10%, depending on the type of product, utilities, or location.

In 2017, the real estate is forecasted to be still in the growth phrase, but the increasing can be slower than in 2016. Forecasts to 2020, the market will be adjusted to address the supply-demand mismatch currently tends to shift towards the premium segment (including real estate in terms of tourism and resort)

As reported by CBRE Vietnam, from the second quarter of 2016, the market saw buying back of luxury real estate with primary asking price from $ 3,500 / m2 (80 million/m2) or higher.

Trading activities of this segment has been quiet since 2014, has had a bit lively in QIII / 2015 and now there are signs of more robust with supply from Vinhomes Golden River (about 1,000 apartments of the Aqua), D'.Palais de Louis (242 apartments), the combination Madison (187 apartments), Waterfront Saigon (33 apartments), Lavenue Crown (200 apartments), The One (420 apartments), The Nassim Thao Dien (238 apartments) ... The majority of these projects are located in the favorable district 1.
Ms. Duong Thuy Dung - Director of Market Survey Department of CBRE Vietnam predicts that in 2017, the luxurious apartments will account for about 3% of the total supply. This ratio in 2016 was 1%.

Accordingly, in the next year, separate segment of average class housing in Ho Chi Minh City will receive about 10,000 apartments. Meanwhile, the segment of luxury apartments exceed double, most projects are located in the downtown district and the East. Typically, thousands of apartments in the project The Empire City are located in Thu Thiem, or more than 200ha of Novaland project in Thanh My Loi and 100ha of Him Lam Land at the former golf course in District 2 and of course, we cannot fail to mention urban areas of Dai Quang Minh Sala also with more than 100 hectares in the heart of Thu Thiem.

That's not to mention nearly 5,000 apartments in Saigon Peninsula project with an investment of over $ 6 billion and 4 other super luxury projects of Truong My Lan will debut in 2017 in the South.

Because many projects in this segment have huge area, so the supply from the East is very diverse in terms of price. Is probably the most expensive area of Thu Thiem at around USD4,000 - USD6,000 / m2. A little further is the Hanoi Highway, Mai Chi Tho, Dong Van Cong price falls between USD2,500-USD3,000/ m2.

Vo Van Huu Phuoc - Director, Head of Valuation and Research Vietnam Cushman & Wakefield, said that in 2017, the luxury segment with the growth, but high-end real estate groups have sizable supply. This could lead to oversupply by purchasing power and affects the luxury segment in the future. Mr. Phuoc also said that in 2017, the intermediate segment and affordable housing will still lead the market.

Gia Khang
Source: Tri thuc tre