HCMC real estate transactions skyrocket in third quarter

The real estate market in Ho Chi Minh City recorded 2,003 transactions in the third quarter of this year, an increase of 561% quarter-on-quarter and 102% year-on-year.

A report by property consultancy firm Savills Vietnam says the Glory Heights project, located in the Vinhomes Grand Park urban area, accounted for 55% of total sales in the third quarter.

Vinhomes is the real estate arm of Vietnam’s largest private conglomerate Vingroup.

The absorption rate (the rate of available homes sold in a specific market within a given time period) improved by 21 percentage points quarter-on-quarter and 12 percentage points year-on-year to 26%.

The report says supply in the HCMC real estate market in Q3 increased 572% from Q2 and 11% over the same period last year to 2,528 units coming from two new projects and new phases of six existing projects.

The Eastern area of HCMC (Thu Duc city) accounted for 74% of the city’s total supply, of which the Glory Heights project (Grade B) made up 59%. Other new supplies came from Grade B and C projects in Binh Tan and Binh Chanh districts.

Supply in the primary market rose 32% quarter-on-quarter and 12% year-on-year to 7,722 units, partly relieving supply shortages. The Grade B apartment segment accounted for 49% of the supply, followed by Grade C (34%) and Grade A (17%).

Excluding 1,100 transactions at Glory Heights, Grade C projects saw 651 transactions, showing that the demand for affordable housing was still high. Grade B projects had 210 transactions, while Grade A only 42.

The third quarter saw developers apply many promotion policies, including interest and principal payment support, extension of payment deadlines and commitments to get rent for properties.

Savills Vietnam experts predict that by the end of this year more than 1,900 new units will be offered for sale. The Grade C segment will take the lead with a 69% market share, followed by Grade B (26%) and Grade A (5%).

The Privia, a new project of Khang Dien House Trading and Investment JSC in Binh Tan district, new phases of Khai Hoan Land’s La Partenza project in Nha Be district, and An Gia Investment’s West Gate project in Binh Chanh district are expected to be launched this month.

A number of suspended projects will also resume in Q4, including Saigon Construction Corporation's (SCC) Salto Residence and Hung Phu Invest's Fiato Premier.

The report quotes Troy Griffiths, deputy managing director of Savills Vietnam, as saying reduced lending interest rates and other supportive actions from the government will stimulate supply growth and boost the market.

Meanwhile, property expert Nguyen Hoang has also noted that the real estate market in HCMC and neighboring provinces saw more positive developments in Q3 than before.

More apartment projects opened for sale in the quarter and the number of transactions increased. In July, a project in Thu Duc city sold up to two thirds of the units on offer and another one in Binh Tan district sold 50-60%. These projects in the Grade B segment carried a price range of VND40-60 million ($1,640-2,460) per square meter.

"A few projects cannot represent the entire market, but they signal improvements in the market," Hoang says, cautioning that Q4 man not bustle as expected because of lingering difficulties and challenges. However, a slight increase from Q3 is possible, though, he adds.