Southern real estate market on the slide
A gloomy atmosphere overwhelmed the real estate market in southern Vietnam in November, with new supply falling and consumption hitting its lowest since the beginning of the year.
A report on the real estate market in Ho Chi Minh City and its surroundings by property consultant DKRA Group showed that most segments “stood still” while both supply and demand plunged in November.
In the apartment segment, new supply decreased significantly, with only nine projects offering 581 units, equivalent to only 19% of the same period in 2021.
Ho Chi Minh City accounted for 75% of the total apartments for sale and Binh Duong province 25%, while Long An, Dong Nai, Ba Ria - Vung Tau, Tay Ninh provinces had no new supply.
In the southern metropolis of HCMC, projects were mainly in Thu Duc city, with luxury apartments making up 36% of the city's total supply.
Last month, only 213 new units were sold, a drop of 89% year-on-year, with the consumption rate reaching 37%, the lowest level since the beginning of the year. The absorption rate across all projects hovered around 30-40%.
Some investors continued to offer discounts for quick payment worth up to 40-50% of real estate value to stimulate market demand. In HCMC, the lowest price in the primary market was recorded at VND43 million ($1,800) per square meter and the highest was up to VND430 million ($18,240). In Binh Duong, the respective figures were VND19 million ($806) and VND49 million ($2,078).
Liquidity in the secondary market continued to decline, with prices dropping 3-5% compared to October.
In the townhouses and villas segment, there were nine new projects with 318 units, down 77% compared to the same period in 2021. Supply mainly came from Dong Nai province, accounting for 52.8% of the total. Of which, 172 units were sold, down 83% year-on-year.
The consumption rate reached 54%, an increase of 4.5 times compared to October, but equivalent to only 17% of the figure one year ago.
Notably, inventories opened for resale in the month made up 70-90% of the total offered with the prices unchanged compared to the previous offerings. In the secondary market, many investors offered stop-loss prices to recover capital but there were almost no successful transactions.
It is forecast that in December, supply and demand will mainly center on Dong Nai, Ho Chi Minh City, Binh Duong and Long An. Meanwhile, Ba Ria-Vung Tau and Tay Ninh will still face a scarcity of new supply.
The primary market recorded the highest price of up to VND92.8 billion ($3.94 million) per unit and the lowest of VND5.2 billion ($220,600) in HCMC; VND63.7 billion and VND11.6 billion in Dong Nai; VND16.2 billion and VND3.3 billion in Binh Duong; and VND4.8 billion and 4.7 billion in Long An.
Particularly, the land plot segment saw new supply increase by 8.3% compared to the same period in 2021, of which Binh Duong accounted for 68.8% of the total. The whole market had six projects with 727 units, of which 510 were sold, up 1.4 times over the same period last year. The consumption rate reached 70%.
According to Vo Hong Thang, R&D deputy director of DKRA Vietnam, the real estate market is falling into a state of "hibernation" with supply and demand falling since the middle of the second quarter. The demand in some segments was equal to only 10-20% of begining the year. The downtrend has shown no signs of abating and is likely to spread on a large scale.
In addition, legal barriers for real estate projects over the past three years still remain, causing supply in the market to fall sharply as enterprises have no projects to implement. Meanwhile, increasing costs have pushed businesses into the current difficult situation.
Notably, Thang held that since mid-April, the State Bank of Vietnam has strengthened control of credit into real estate as well as bond issuance, leaving most property developers thirsting for capital.
"As all capital-raising doors are almost closed, real estate businesses are now hanging by a thread. Many investors and brokers have been forced to cut off personnel in order to optimize operational efficiency in the current situation," Thang said, adding that what companies are waiting for is the regulators’ next moves to ease their current "thirst" for capital.
According to DKRA Vietnam, market demand increased slightly, focusing on projects with complete infrastructure and legal status. However, there were also stop-loss offerings by customers with high financial leverage ratios under heavy pressure from rising interest rates. However, market liquidity remains very low.
- Read More
Foxconn’s subsidiary Shunsin to invest $80 mln in northern Vietnam to produce integrated circuits
Shunsin Technology (Bac Giang, Vietnam) Limited, a subsidiary of Taiwanese giant Foxconn, will invest $80 million in Vietnam’s northern province of Bac Giang to produce integrated circuits (IC).
Industries - Mon, November 4, 2024 | 10:44 am GMT+7
Q3 earnings of Vietnam’s listed firms up 21.6%: FiinGroup
Net profits of listed companies in Vietnam increased 21.6% year-on-year in the third quarter of this year, maintaining a stable growth rate since the start of this year, according to local financial data provider FiinGroup.
Finance - Mon, November 4, 2024 | 9:31 am GMT+7
Thailand SCG’s revenue in Vietnam up 15% to $1.1 bln in Jan-Sept
Thailand’s Siam Cement Group (SCG) recorded a revenue of THB36.71 billion ($1.08 billion) in Vietnam in the first nine months of this year, up 14.7% year-on-year.
Companies - Mon, November 4, 2024 | 8:00 am GMT+7
Nghiem Xuan Thanh appointed Party chief of Khanh Hoa province
Nghiem Xuan Thanh, Party chief of Hau Giang province, was appointed by the Politburo, the country’s supreme decision-making body, to be Khanh Hoa province’s Party chief for the 2020-2025 term.
Politics - Sun, November 3, 2024 | 7:45 pm GMT+7
Thailand seeks FTA negotiations with Eurasian Economic Union
Thailand is holding talks with Russia to expedite negotiations for a free trade agreement (FTA) with the Eurasian Economic Union (EAEU).
Southeast Asia - Sun, November 3, 2024 | 7:20 pm GMT+7
Indonesia attracts foreign investment in technology sector
As many as 19 Australian companies have expressed an interest in investing in Indonesia's technology sector, Communication and Digital Affairs Minister Meutya Hafid said on Thursday.
Southeast Asia - Sun, November 3, 2024 | 7:18 pm GMT+7
Robots work hard, don’t argue: Viettel exec counsels effective use of technology
Small businesses in logistics should look to use existing tools, software and technology solutions effectively, says Dinh Thanh Son, deputy CEO of Viettel Post.
Companies - Sun, November 3, 2024 | 4:30 pm GMT+7
Vietnamese multi-sector group Masan uses AI to forecast product sales: executive
AI has helped Masan Group forecast the number of items likely to be sold during peak season based on available data and to optimize product placement, says An Luong, head of the corporation’s artificial intelligence & data science division.
Companies - Sun, November 3, 2024 | 2:51 pm GMT+7
Vietnam needs large, specialized logistics centers to compete better: official
Vietnam needs large-scale, specialized logistics centers that will enable greater competitiveness of local economies and enterprises, says Tran Thanh Hai, deputy head of the Ministry of Industry and Trade's agency of foreign trade.
Economy - Sun, November 3, 2024 | 11:00 am GMT+7
Vietnam manufacturing sector sees 35% increase in Q3 job orders: Adecco
Vietnam’s manufacturing and sourcing sectors saw a substantial 35% year-on-year increase and a 52% quarter-on-quarter increase in Q3/2024 job orders, global workforce solutions provider Adecco said in a reseach report released Thursday.
Economy - Sun, November 3, 2024 | 9:00 am GMT+7
Construction majors to continue capitalizing on public investment projects
Vietnamese construction giants are expected to continue capitalizing on public investment projects for the remainder of this year after delivering strong performances in the third quarter, analysts say.
Companies - Sun, November 3, 2024 | 8:00 am GMT+7
Former Government Office chairman receives $7,900 bribe from property project
Mai Tien Dung, former Minister-Government Office Chairman, received a bribe worth VND200 million ($7,900) from Nguyen Cao Tri, owner of the Dai Ninh eco-resort and urban area project in Lam Dong province.
Society - Sat, November 2, 2024 | 9:13 pm GMT+7
Thai food giant CP enters public-private partnership to promote food system transformation
Thai-invested C.P. Vietnam Livestock JSC and the Partnership for Sustainable Agriculture Vietnam (PSAV) signed a memorandum of understanding Friday on working together to advance sustainable agriculture in the country.
Companies - Sat, November 2, 2024 | 7:16 pm GMT+7
Central Vietnam province Quang Ngai to begin work on new VSIP industrial park next year
Vietnam’s central province of Quang Ngai will work with the investor to have construction of VSIP II Quang Ngai, a facility based on the Vietnam-Singapore Industrial Park (VSIP) model, begin in August 2025.
Industrial real estate - Sat, November 2, 2024 | 3:47 pm GMT+7
Vietnam likely to grow 6.5% in 2024-2025: VinaCapital
VinaCapital, among the biggest foreign-run asset managers in Vietnam, has forecast the country’s economy to achieve 6.5% growth in both 2024 and 2025, with the composition of the expansion to change to more domestically driven factors next year.
Economy - Sat, November 2, 2024 | 2:00 pm GMT+7
Major Vietnamese developer Novaland appoints new CEO
Duong Van Bac, who joined Novaland as chief financial officer in August 2023, has been appointed general director, starting Friday.
Companies - Sat, November 2, 2024 | 10:24 am GMT+7