Photo: Duc Anh
Landed property experiences solid quarter in HCMC and Hanoi.
Landed property saw active performance in both the Ho Chi Minh City and Hanoi markets during the second quarter, according to the latest reports from real estate consultants.
There were 820 landed property sales in Ho Chi Minh City, for growth of 81 per cent quarter-on-quarter and 110 per cent year-on-year, according to Savills Vietnam.
Historically a townhouse in Ho Chi Minh City was three times more costly than a high-end apartment. This has now fallen to 1.7 times in newly-developed areas and is well within reach for many.
Savills Vietnam also forecast that landed property demand in 2016 would be 103 per cent higher year-on-year in Ho Chi Minh City and 88 per cent higher in Hanoi. Compared to regional peers with similar population densities, such as Kuala Lumpur, Bangkok and Jakarta, Ho Chi Minh City and Hanoi’s primary supply of landed housing (less than 10 per cent) is relatively small, leaving ample room for future growth.
The local landed property market promotes sustainability due to a healthy purchaser structure, according to Mr. Troy Griffiths, Deputy Managing Director at Savills Vietnam.
“End-users account for the majority of purchasers, with speculators less than 10 per cent,” he added. Investors are substantial in the townhouse segment, prompting an expanding rental market in the near future. “Townhouses have outperformed other residential asset classes in investment returns thanks to land value appreciation and stable rentals,” he went on.
In this quarter Hanoi’s landed property market saw eight newly-launched projects, including Vinhomes Thang Long, Gamuda Phase 2 (semi-detached villas), FLC Eco House, Park Hill Shophouse, The Boutique Shophouse (Times City), Lucky House, Thanh Ha B and 622 Minh Khai, adding a total of 1,592 units to the market, or equal to the number of new launches in 2015, according to CBRE Vietnam’s second quarter report.
New projects are mainly located in districts that are 7-10 km away from Hanoi’s CBD with abundant land banks, such as Ha Dong, Hoai Duc, Long Bien, Tu Liem and Hoang Mai, said Ms. Nguyen Hoai An, Director of CBRE Vietnam. “While a dominant portion of shophouses were reported to launch in Quarter 1, that of villas and terraced houses returned to be recorded in Quarter 2, taking up 89 per cent of new launches,” Ms. An said.
The average secondary price increased 2.9 per cent quarter-on-quarter and 1.7 per cent year-on-year. Core urban districts with completed infrastructure and available amenities such as Cau Giay, Ha Dong and Hoang Mai continued to witness increases of 0.5-6 per cent quarter-on-quarter in secondary price.
In the meantime, suburban districts such as Gia Lam, Hoai Duc and Me Linh saw decreases, ranging from 0.4 per cent to 2.7 per cent quarter-on-quarter.
In addition, average secondary prices of landed projects in core urban districts were 1.1 to 2 times higher than the primary prices, CBRE Vietnam’s report noted.
Meanwhile, thanks to high-end projects that have already been launched in this quarter, average primary prices recorded in suburban districts were much higher than average secondary prices. This is expected to enhance the secondary value of projects in suburban districts in upcoming quarters.