Colliers International Vietnam HCMC Market Insights Q32015 - Villla/Townhouse Sector (ENG)

1. PERFORMANCE
In Q3 2015, the primary average asking price of new launched projects
continued its upward trend since the last quarter of 2014 thanks to
improved economic conditions and investor confidence.
The most sought-after villa projects still located in District 2, District 7
and District 9 with prices in some cases reaching to US$3,400-3,600/
sqm. On the secondary market, prices remained stable due to limited
supply. The sales volume improved with a growth rate of 5% q-o-q and
76% y-o-y.
SUPPLY
The review quarter recorded five new launched projects on the primary
market. The existing supply pipeline comprises approximately 6,700
villas and townhouses from 51 projects.
As land availability in the city center are limited, villa and townhouse
projects are developed mainly in non-CBD locations. 80% of supply is
focused on District 2, District 7, District 9 and BinhThanh District which
have well-established infrastructure and connectivity. Amongst active
emerging districts, District 9 is home for 31% market share with majority
of current supply located near the Eastern Ring Road.
DEMAND
Although condominiums have become popular with the local market
recent years, landed property is still the preferred choice of housing.
Moreover, landed property is one of the traditional investment channels
given its long-term capital gain.
VILLA/TOWNHOUSE SECTOR
Q3 2015 | MARKET INSIGHTS
HO CHI MINH CITY
Economy overview
The Vietnamese economy continued to show positive growth in Q3 2015.
GDP in Q3 increased 6.5%year on year (y-o-y), which is the highest
growth rate among the six key economies of Southeast Asia. Total retail
sales and consumer services in the first nine months of 2015 were
estimated at VND 2,374.5 trillion, up 9.8% compared to the same period
last year.
The CPI increased nominally at 0.74% y-o-y, the lowest level in the past
10 years. FDI pledges year to date, rose 53% from a year ago to $17
billion, with strong inflows into the manufacturing sector and production
of export goods and the associated services sector rose 6.17% in the
first nine months.
The State Bank of Vietnam issued government bonds highlight
improvements in the economy showing significant yield compression
with an average in Q3 of 6.7% and 7.1% for five year and ten year bond
respectively.
In the long term, the economy will benefit from domestic reforms and
trade liberalization as a pre requisite of Vietnam membership of the
Trans-Pacific Partnership (TPP), the Free Trade Agreement (FTA) and
further ASEAN integration.
DAVID JACKSON
General Director
david.jackson@colliers.com
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©2015 Colliers International Research
In terms of customer profile, there are two main groups of
buyers. Investors prefer to purchase new launches, taking
advantage of good initial pricing and end-user buyers who are
are more cautious and pay more attention in developer’s brand
name, construction progress and quality of the finishing.
OUTLOOK
The year-end will mark a slight rise in secondary price of
compounded villa and townhouse developments since there
will be no considerable new supply entering the market. Selling
price of the primary market will be unchanged since current
projects achieved efficient take-up rate. In the next three years,
newly launched projects are expected to be on a larger scale.
Stability is predicted in average asking price land lot segment in
both primary and secondary market given moderate supply and
increasing demand.
*Price excludes VAT
Table 1: Market Summary
Villa and Townhouse
Performance
Q3 2015 Q4 2015F
Absorption rate
Primary Price
($US/sqm)
Construction
Source: Colliers International Research
Figure 1: Supply by year
Source: Colliers International Research
Figure 2: Average asking price
Source: Colliers International Research
HA VO
Senior Research Analyst
ha.vo@colliers.com
0
1000
2000
3000
4000
5000
6000
7000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
YTD
2016F
Existing supply New supply
units
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
US$/sqm
District 7 District 9 District 2 Others