Mr. Neil MacGregor, Managing Director of Savills Vietnam, tells VET about the potential of property investments in the eastern area of Ho Chi Minh City.
■ What factors contribute to the potential of the east of Ho Chi Minh City in attracting real estate development compared with other parts of the city?
The key factor for the eastern area is its strategic position as a gateway to the city and southern provinces. This factor alone has generated significant investment in infrastructure, housing, and commercial projects in the area. The planned financial district of Thu Thiem and the future Ben Thanh - Suoi Tien urban railway line have generated huge interest from developers and homebuyers alike.
■ Are you receiving many requests for consultancy from real estate developers expressing interest in investing in the city’s east?
Savills has been actively working with investors and developers on a range of projects in Districts 2 and 9, including key projects within the Thu Thiem urban area. The construction of the urban railway line has had a positive impact on the development of projects in the area, especially in District 2. Most enquiries have been regarding the apartment market in the east and whether there is sufficient sustainable demand to support the large volumes of supply in the area. In the first six months of this year the number of such enquiries increased 65 per cent compared with the second half of 2014.
■ What are your forecasts for price performance in real estate developments in the city’s east?
We expect projects along the Hanoi Highway, particularly those located in Thao Dien, to perform well in the lead up to Metro Line No. 1 becoming fully operational around 2020. While there may be periods of short-term oversupply with slower price appreciation, we expect good price growth as infrastructure continues to improve and more facilities and services are opened. The prospect of more schools, hospitals, and international-standard shopping malls are all positive signals that will support the sustainable growth of the market. For better quality projects we have seen price increases of around 10 to 15 per cent in the last 12 months.