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Hanoi's apartment for sale market dips slightly

Released at: 15:49, 05/04/2016

Hanoi's apartment for sale market dips slightly

Small decline seen in opening quarter of 2016 according to CBRE.

by Hoang Thu

In the first quarter of 2016 a total of 4,318 new units were launched from 16 real estate projects in Hanoi; an 18 per cent fall compared to the first quarter of 2015, according to CBRE’s Hanoi Q1 2016 Review report released on April 5.

A total of 4,048 units were sold during the quarter, indicating active sales activity despite representing a slight decline of 5 per cent year-on-year.

It was noted that the high-end and mid-end segments dominated sales in the quarter, with market shares of 48 per cent and 36 per cent, respectively.

The low-end segment saw a dip in sales, which may be attributed to recent changes in the implementation of the government’s VND30 billion ($1.35 billion) housing credit support package, according to Ms. Nguyen Hoai An, Director of CBRE Vietnam. The package will expire in June under Circular No. 11/2013/TT-NHNN and this has started to affect purchasers in the affordable sector.

Another regulatory change that may have an impact on the residential market is the proposed amendments to Circular No. 36 regarding limits on and ratios of bank financing to the property market. The proposed amendments include lowering the ratio of short-term capital used for medium and long-term loans and increasing the asset risk ratio for property loans.

In terms of pricing, the report noted that certain projects in good locations and with sufficient amenities and facilities have increased their prices.

On average, however, only primary prices in the mid-end segment increased, by 2.9 per cent, while those in the high-end and low-end segments saw declines of 0.3 per cent and 7.8 per cent, respectively.

On the resale front, average market prices have improved across the high-end, mid-end and affordable sectors, but declined in the luxury sector quarter-on-quarter as a number of aging luxury projects have seen resale prices fall.

Moving forward, the west and southwest of Hanoi still have the most number of units, accounting for 75 per cent of total supply.

Ba Dinh district is expected to welcome three high-end projects supplying 488 units. Given strong supply in the pipeline and seemingly strong sales, the market may be stabilizing after experiencing unprecedented growth in 2015.

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