C&W: Hanoi & HCMC residential markets differ greatly in Q2
Hanoi’s residential market has remained active, especially in its western and southern areas, while a downtrend has been recorded in Ho Chi Minh City, according to Cushman & Wakefield Vietnam (C&W)’s second quarter report on the two cities’ residential markets.
Hanoi saw 8,570 units launched, 53 per cent of which were in Grade B projects. Two-thirds of the new supply was in Tu Liem, Hoang Mai, and Thanh Xuan districts, which also held the largest shares of sales, accounting for 32 per cent, 17 per cent, and 14 per cent, respectively.
Grade B projects continued to lead the market, constituting 50 per cent of total transactions, followed by Grade C with 37 per cent, the report noted.
Over the next three years, new supply released in the western, southern and south-western districts of Hanoi are estimated to contribute 70 per cent of stock in the northern market.
Similarly, overall average selling prices across all grades as at the second quarter of this year stood at VND29.83 million ($1,312) per sq m, up 1 per cent quarter-on-quarter and 4 per cent year-on-year. All grades recorded price increases from 2 to 4 per cent compared to the previous quarter, mainly due to higher prices at newly-launched projects.
Conversely, Ho Chi Minh City’s new supply in the quarter stood at some 7,600 units, down 5 per cent quarter-on-quarter and 21 per cent year-on-year, 38 per cent of which came from Grade C projects.
The majority of additional stock was in eastern districts, with 69 per cent, followed by southern districts, with 13 per cent. Eastern districts also saw the largest number of units sold in the quarter, accounting for over half of total transactions.
In the short term, future supply will mainly be concentrated in the eastern and western districts, which will contribute 39 per cent and 26 per cent of market stock, respectively.
Overall average prices in all grades during the second quarter stood at VND32.46 million ($1,428) per sq m, up 4 per cent quarter-on-quarter but down 3 per cent year-on-year, mainly due to lower prices in large-scale Grade A projects.
Limited supply was the main reason for high prices in the CBD, which were more than triple those outside of the CBD.
“We have seen strengthening in asking rents across the city in the past 12 months and the market will welcome some much-needed supply during the remainder of the year,” said Mr. Vo Van Huu Phuoc, Director of Valuation & Research at C&W Vietnam.
“Tenants should be preparing for a competitive market place as we will see more ‘churn’ of deals with a high number of big relocations. We have pent up demand from occupiers and the second half of 2017 will be a good time to strike competitive terms as landlords start to feel some pressure on their occupancy rates.”
Illustrative photo.
Hanoi saw 8,570 units launched, 53 per cent of which were in Grade B projects. Two-thirds of the new supply was in Tu Liem, Hoang Mai, and Thanh Xuan districts, which also held the largest shares of sales, accounting for 32 per cent, 17 per cent, and 14 per cent, respectively.
Grade B projects continued to lead the market, constituting 50 per cent of total transactions, followed by Grade C with 37 per cent, the report noted.
Over the next three years, new supply released in the western, southern and south-western districts of Hanoi are estimated to contribute 70 per cent of stock in the northern market.
Similarly, overall average selling prices across all grades as at the second quarter of this year stood at VND29.83 million ($1,312) per sq m, up 1 per cent quarter-on-quarter and 4 per cent year-on-year. All grades recorded price increases from 2 to 4 per cent compared to the previous quarter, mainly due to higher prices at newly-launched projects.
Conversely, Ho Chi Minh City’s new supply in the quarter stood at some 7,600 units, down 5 per cent quarter-on-quarter and 21 per cent year-on-year, 38 per cent of which came from Grade C projects.
The majority of additional stock was in eastern districts, with 69 per cent, followed by southern districts, with 13 per cent. Eastern districts also saw the largest number of units sold in the quarter, accounting for over half of total transactions.
In the short term, future supply will mainly be concentrated in the eastern and western districts, which will contribute 39 per cent and 26 per cent of market stock, respectively.
Overall average prices in all grades during the second quarter stood at VND32.46 million ($1,428) per sq m, up 4 per cent quarter-on-quarter but down 3 per cent year-on-year, mainly due to lower prices in large-scale Grade A projects.
Limited supply was the main reason for high prices in the CBD, which were more than triple those outside of the CBD.
“We have seen strengthening in asking rents across the city in the past 12 months and the market will welcome some much-needed supply during the remainder of the year,” said Mr. Vo Van Huu Phuoc, Director of Valuation & Research at C&W Vietnam.
“Tenants should be preparing for a competitive market place as we will see more ‘churn’ of deals with a high number of big relocations. We have pent up demand from occupiers and the second half of 2017 will be a good time to strike competitive terms as landlords start to feel some pressure on their occupancy rates.”
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