Transactions fall 20% in third quarter against record result in second quarter.
The number of successful transaction in Ho Chi Minh in the third quarter was only 7,862, a 20 per cent decrease compared to the record of over 10,000 in the second quarter, according to a report from CBRE Vietnam on the city’s property market. The absorption rate has fallen significantly.
The reason is the high amount of supply coming on to the market. In the third quarter there were 10,000 apartments on sale, of which supply in the southern part of the city, including Districts 4, 7, and 8 and Nha Be district, was increasing. In the first nine months of the year there were 25,000 apartments on sale in the city.
Supply was previously focused on the eastern side of the city but is now distributed around other areas. This has caused buyers to hesitate.
Ms. Duong Thuy Dung, Associate Director of Research and Consulting at CBRE Vietnam, believes that market liquidity for apartments is going down but not by much. Only when the absorption rate is at 50 per cent or lower is it seen as unstable. “We are still observing the market and will issue a warning as soon as there are any disturbing signs,” she was quoted as saying.
The market, she said, is now distributed around many areas of the city with more target segments. Many firms are extending from the premium segment towards the middle segment in order to diversify supply, increase opportunities to approach customers, and effectively stimulate demand. This is a sound multiple strategy because it will avoid monopolies and price increases. She forecast that to the end the year apartment projects on sale in the city will be more segmented, but premium apartments will still dominate. Market liquidity is likely to slow down and stay flat.