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Savills releases Property Price Index

Released at: 10:36, 28/11/2018

Savills releases Property Price Index

Photo: Duc Anh

Latest index for October released on November 27.

by Doanh Doanh

The Savills Residential Index was 97 in the third quarter of 2018, increasing 1 point quarter-on-quarter and 3 points year-on-year, according to the Savills Property Price Index (SPPI) in October 2018 released on November 27. The total transaction volume was the lowest for six consecutive quarters, at 10,000, down 30 per cent quarter-on-quarter and 13 per cent year-on-year. Absorption of 53 per cent decreased 3 percentage points (ppts) quarter-on-quarter but increased 21 ppts year-on-year.

Grade A increased 58 per cent quarter-on-quarter from sales in a new upscale project in Thu Thiem new urban area. Grade C accounted for 54 per cent of total transaction volumes.

To 2020, over 124,000 units are expected to launch and Districts 2 and 9 will account for 55 per cent of future supply. Infrastructure improvements and the planned Innovation Area will strengthen residential demand.

The Office Index in Ho Chi Minh City in the third quarter was the highest for the last five years, at 99, up 4 points quarter-on-quarter and 9 points year-on-year. Improvements were due to quarterly increases in rents and overall occupancy.

The non-CBD had higher occupancy than the CBD for the first time in five quarters, at 98 per cent, up 2 ppts quarter-on-quarter and 4 ppts year-on-year.

The non-CBD office index reached 105, up 4 points quarter-on-quarter and 10 points year-on-year. Despite stable occupancy, the CBD index increased to 102, up 3 ppts quarter-on-quarter and 9 ppts year-on-year due to the 3 per cent quarter-on-quarter rise in rents. Total take-up was over 24,800 sq m, down 31 per cent quarter-on-quarter and 18 per cent year-on-year due to limited new supply and low vacancy.

The Residential Index in Hanoi decreased by less than 1 point quarter-on-quarter and year-on-year to 104.5 in the third quarter. The average absorption rate was 23 per cent, with sales reaching approximately 6,300 units, down 16 per cent quarter-on-quarter but up 11 per cent year-on-year.

Grade B dominated, with a 51 per cent share or 22 per cent absorption, whilst Grade C performed well with 33 per cent of sales. Grade A transactions had the highest growth, of 232 per cent quarter-on-quarter and 40 per cent year-on-year.

According to Savills, by 2020, Grade C will account for 46 per cent of future supply due to affordable selling prices, which appeal to buyers. With a 23 per cent market share, Hoang Mai district will supply the most stock.

The Office Index in Hanoi was 69.4, up 0.9 points quarter-on-quarter and 4.1 points year-on-year. While there was an upwards trend, quarter-on-quarter changes were minor given the low vacancy, suggesting the market could further increase. The CBD index rose by 0.2 points quarter-on-quarter and 4.8 points year-on-year as performance continued to improve at a slower rate, due to limited space. The non-CBD index was up 1.3 points quarter-on-quarter and 5.5 points year-on-year.

In the short-term, the CBD in Hanoi is expected to see rents increase with two new projects coming online in 2019.

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