Colliers International Vietnam HCMC Market Insights Q22015 - Condominium Sector (ENG)

1. SUPPLY
The economic recovery has increased developers’ investment confidence
with signs of aggressive new launches from all segments. In Q2 2015, a
total of 2,405 new units entered the market including three new high-end
projects (Gateway Thao Dien in district 2, Everich Infinity in district 5 and
Sky Center in Tan Binh District); one mid-end project (An Gia Riverside in
district 7); and one low-end project (Saigonres Plaza in Binh Thanh). The
Vista Verde, Snenic Valley and Him Lam Cho Lon project also continued to
launch their latter phases with more than 700 units.
This pushed the current total primary supply in all grades up to approximately
25,000 units, significantly increased 70% q-o-q. High-end was the most
active segment in 1H 2015, accounted for 62% of total supply in 2015.
PERFORMANCE
The condominium market has experienced strong sign of recovery in both
supply and transaction volume. In Q2 2015, the average absorption rate was
16%, in which the low to mid-end segments achieved highest absorption
rate, at 20 percent.
In terms of transaction volume by location, due to infrastructure expansion,
district 2 and 7 remained the most sales, with 35% of the total transactions.
These are mainly projects of mid to high-end that benefit from the proximity
of the Metro Line and the new established high-quality living community.
On the other hand, low-end segment transactions were reported in densely
populated districts like Binh Thanh, Tan Phu and Binh Tan, accounting for
30% of total market share. With high immigration rate, up to 90% of sales
in these areas were absorbed by existing citizens in the circle area as a
result of the living habit of not residing far away from their established
community.
DEMAND
Projects that provide a diversification of products such as room size, room
layout, and high-quality custom uses are the top features of most projects
launched this year. Property buyers have become more encouraged by
strong commitment of top-tier developers to their projects and attractive
financial incentives such as extended payment scheme and back-up housing
securities from reliable banks during the project construction.
CONDOMINIUM SECTOR
Q2 2015 | MARKET INSIGHTS
HO CHI MINH CITY
Figure 1: New supply by district
ECONOMY OVERVIEW
Vietnam has experienced a positive sign of the economic recovery in
1H 2015 when GDP grew 6.28% y-o-y, which is the highest level in the
last 10 years. The consumer confidence index also witnessed significant
improvement when reaching 143.1 points, up 10 ppts y-o-y compared to the
average target of last year.
Total disbursement rate in the foreign funded projects grew by 9.6% y-o-y
to US$6.3 billion. In which, real estate sector continued to attract lucrative
foreign direct investments with 13% of total new FDI, placed at second
after manufacturing.
In parallel with the new legal amendment of the Vietnam Housing Law
came into effect in July 1st 2015 allowing foreigners to legally own, sell
and transfer their properties will boost confidence in property investments.
Luxury High-end Mid-end Low-end Total
Total Supply (Projects) - 3 3 1 7
Total Supply ( Units) - 1,416 794 195 2,405
Absorption rate
Primary Price
(US$/sqm)
Construction
Table 1: Market Snapshot
Figure 2: New launched condominium primary asking price
DAVID JACKSON
General Director
david.jackson@colliers.com
PLEASE CONTACT US FOR ANY INFORMATION
TRAN NGUYEN
Business Development Manager
tran.nguyen@colliers.com
www.colliers.com/vietnam
Colliers International is a global leader in commercial real estate services, with over 16,300 professionals operating out of more than 502 offices
in 67 countries. A subsidiary of First Service Corporation, Colliers International delivers a full range of services to real estate users, owner and
investors worldwide, including global corporate solutions, brokerage, property and asset ,management, hotel investment sales and consulting,
valuation, consulting and appraisal services, mortgage banking and insightful research. The latest annual survey by the Lipsey Company ranked
Colliers International as the second-most recognized commercial real estate firm in the world.
This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no
guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties
of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers
International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability
for loss and damages arising there from. This publication is the copyrighted property of Colliers International and/or its licensor(s).
©2015 Colliers International Research
*Price excludes VAT
-
500
1,000
1,500
2,000
2,500
District 2 District 7 Tan Binh District 5 Binh Thanh District 6
Source: Colliers International Research
US$/sqm
OUTLOOK
An abundant of approximately 15,500 units of total future supply
is expected to come online in 2015. Due to insufficient land
availability, future launches will continue to concentrate in the
non-CBD. Particularly, projects supported by booming municipal
infrastructure that lined adjacent to the Metro route linked with
the CBD such as District 2, District 4, District 7 and Binh Thanh
promise enormous prospects for capital appreciation in the near
future.