The residential housing market in Ho Chi Minh City and nearby areas in the third quarter of 2022 saw drastic decreases in both supply and demand due to interest rate hikes and the government’s tightened credit control, according to DKRA Vietnam.
The property consultancy, in a new market report, said there were some concerns about the risk of freezing in the market.
In the segment of land plots, Q3 saw nine projects up for sale with 1,057 products, down 65.6% compared to Q2. About 550 units, or 52% of the new supply, were bought, down 77.8%. Binh Duong province accounted for 59% of the new supply.
DKRA forecast that Q4’s new supply of land plots would increase slightly to 1,500-2,000 plots, mainly in Binh Duong, Dong Nai and Long An provinces.
Demand in this segment is at the lowest level since the beginning of the year, the firm said.
In the apartment segment, the new supply had 4,873 units from 31 projects, down 63.8% on Q2. Of these, 2,531 units were sold, down 77.5%. More than 91% of the new supply was in HCMC and Binh Duong.
The average primary selling price increased by 5%-8% compared to Q2, but a number of projects in HCMC’s eastern area recorded a primary price increase of 12%-16% compared to the end of 2021.
According to the report, Q3 demand for apartments was low in both the primary and secondary markets, with absorption rates from 25% to 60%, mainly due to high interest rates and regulator credit control.
Grade A and C apartments led the market's new Q3 supply, accounting for 35% and 32.7%, respectively. Nearly 74% of the Grade A products were in HCMC, while the Grade C ones were mainly in Binh Duong and other neighboring provinces.
DKRA forecast that the apartment segment’s new Q4 supply would probably increase to 6,000-7,000 units. Among these, HCMC will offer about 3,000-5,000 apartments; Binh Duong some 2,000-3,000; Long An about 350; and Ba Ria-Vung Tau about 500. Overall demand and market liquidity may continue to be affected by the two above-mentioned reasons.
In Q3, the Greater HCMC market recorded a new supply of 3,081 townhouses and villa units, up 22.4% on Q2. However, the consumption rate was only 47%, equivalent to 1,449 units. The new supply was mainly in Dong Nai, Binh Duong and Long An, accounting for 85% of the total.
Primary selling prices increased by 5-8% against Q2 due to higher material costs, inflation, higher interest rates, and harder access to banking loans, according to DKRA.
The firm forecast that new Q4 supply of townhouses and villas may be lower than in Q3, with just about 2,500 units in all, mainly in Dong Nai and Binh Duong.
Notably, the primary market for townhouses and villas in HCMC fell to a year's low in August, with only four sold, while 66 townhouses and villas were offered for sale during the month, said DKRA. In June, 40 were sold, much slower than the 282 in April.
The director of a company developing a housing project in Thu Duc city on HCMC’s outskirts said sales of townhouses and villas started to decline sharply in May.
Liquidity in the HCMC housing market started to turn lower and lower since April due to the tightening of bank credit, according to Nguyen Loc Hanh, CEO of HCMC-based Asia Gem Real Estate Investment JSC.