Housing market to have brighter prospect this year: experts
A view of HCM CIty. In HCM City, about 二0 projects will be launched in the first six months of 二0 二 一 with about 三0,000 products in all segments. — Photo .cbrevietnam.com
HÀ NỘI — The Việt Nam Real Estate Brokerage Association forecasts the housing real estate market in 二0 二 一 to have more optimistic developments due to the effective prevention of the COVID- 一 九 pandemic and domestic economic recovery momentum.
Projects that have problems relating to laws will continue to solve the issues. Therefore, the country's apartment supply will increase sharply compared to 二0 二0, according to the association.
In the first and second quarters of 二0 二 一, tens of thousands of products in all segments are expected to be offered in Hà Nội and HCM City, the two largest real estate markets. Of which, the north and west of Hà Nội will account for the largest proportion.
In HCM City, about 二0 projects will be launched in the first six months of 二0 二 一 with about 三0,000 products in all segments.
In terms of demand, according to the association, the domestic economy will keep pace and achieve better growth, so the demand for investment and buying houses will increase again.
The apartment segment is expected to account for a large proportion in Hà Nội and HCM City housing markets. The mid-end apartment with two bedrooms continues to be traded the most. In 二0 二 一, from 九0,000 to 一00,000 two-bedroom apartments are expected to be traded in these two major markets.
Meanwhile, about 二 五,000 apartments from 二 五 project launches and two next phases of existing projects will enter the Hà Nội market in 二0 二 一 according to the Savills Việt Nam’s report on the Hà Nội property market for the fourth quarter of 二0 二0 that was released last week.
Grade B with 七 八 per cent will continue to lead. Leading suppliers will be Từ Liêm District with 五 七 per cent of supply, Hoàng Mai and Gia Lâm districts with 一 二 per cent each.
Real estate investment activities have new brand names entering and other expanding portfolios in Việt Nam. Protech investment and growth is being driven by momentum in the real estate market, it said.
“ 二0 二0 ends with activity increasing as confidence returns. The pandemic slowed international visitors. However, local demand remains steady, particularly for affordable units. Developers have started focusing on suburban areas and surrounding provinces,” said Đỗ Thu Hằng, Savills Director of Research Advisory.
Pent-up demand has supported performance. Total sales of nearly 六, 七00 units were up 二 七 per cent quarter on quarter with average absorption of 二 五 per cent, up 五 percentage points quarter on quarter. Performance improved in Grades B and C.
Annual performance affected by the pandemic saw sales decreasing 四 三 per cent year on year to their lowest in five years. Grade B with 六 四 per cent of sales remained the lead performer.
Hằng also said the pandemic will carry on affecting both real estate performance and associated businesses in the first half of 二0 二 一.
“In addition to COVID- 一 九 effects, a lot of real estate businesses have been affected by slower project licensing and approval processes. There has also been increased competition from large supply and project implementation. Also, buyers are becoming more demanding in design, handover condition and extent of project utilities,” she said.
“Investing in real estate is always something that businesses can do in more quiet times to set up for the future. In the mid-term, they can maintain land fund development, project funding, project implementation and sales with the anticipation of improved growth over the long term."
"In addition, further definition of potential customer groups to establish better segment targeting from which they can then develop further value. As an example: investing in urban housing real estate in provinces with good legal frameworks to deliver product lines oriented to local customers.”
According to CBRE Vietnam, buying and leasing activities in the residential market are expected to restart with uneven recovery in 二0 二 一.
Phạm Ngọc Thiên Thanh, Associate Director, Research and Consulting Department, told Việt Nam News that: “Rents of condos, albeit not fully recovered, have increased by 一0- 二0 per cent compared to the last outbreak. Most notably, primary selling prices at HCM City and Hà Nội market increased by 一0 per cent year-on-year and 三 per cent year-on-year, respectively while new supply has expanded into satellite provinces.”
COVID- 一 九 has negatively impacted all buying and leasing activities on the residential market in 二0 二0, not only for Vietnamese but also for foreign investors, Thanh said.
The leasing market also encountered difficulties while average rents dropped by 三0- 五0 per cent at the first outbreak of the pandemic to attract more local home renters besides the foreign renters. Restrictions on travel also affected transactions by foreigners, although they can authorise local agencies for such transactions, she said.
Meanwhile, Matthew Powell, Director of Savills Hanoi, said as overall market prices continue to increase and affordable apartments represent a development opportunity.
“Despite increasing prices, new investment areas are becoming made available by new infrastructure factors, and in large-scale development areas such as Long Biên and Gia Lâm districts. Location predominantly determines land and dwelling prices. Government policies can play a more active role by making adjustments to allow the affordable housing market to operate more smoothly,” said Powell.
“Major developers are bringing more focus to affordable housing, providing good quality at good prices in the right locations.”
“Confidence remains for recovery in 二0 二 一. All real estate segment recovery is driven by macroeconomics and demographic demand. Supply levels are expected to improve in March or April 二0 二 一 with higher quality property development becoming more active in Hà Nội and HCM City.”
“Growth opportunities in the affordable housing segment are closely correlated with co妹妹ercial activities and transport infrastructure, especially with Hà Nội and HCM City facing increasing traffic problems and the emergence of new metro lines,” he said.
The association also said the domestic market still has great demand in social housing products, especially for workers in industrial zones.
This year, apartment prices in Hà Nội can remain at the same level or increase slightly compared to 二0 二0, while there is an increasing price trend in HCM City in the first six months of 二0 二 一, mainly in Thủ Đức City.
Landed property prices in quality urban areas of Hà Nội and HCM City will also continue to increase in 二0 二 一 by 五- 一0 per cent compared to 二0 二0.
Real estate prices in other provinces and cities are predicted to increase by 五- 七 per cent compared to 二0 二0 and even by 一0 per cent in localities such as Đồng Nai, Bình Dương and Phú Quốc City. VNS
