Vietnam Real Estate 4Q17
Vietnam Real Estate market report 4Q17
Hereby the Vietnam Real Estate market 4Q17, shared by CBRE,
The end of 2017 marked a transformation of the condominium market from robust growth to more sustainable growth. Even though total new supply showed a decrease, good product configuration helps the market to maintain good absorption.
In Q4 2017 the Vietnam Real Estate market welcomed 8,559 new units, an increase of 12% q-o-q, bringing total 2017 new supply and accumulated supply (since 1999) to 31,106 and 228,903 units, respectively. Total new supply in 2017 decreased by 18% y-o-y, assisting the inventory from 2015 and 2016 to be absorbed. In 2017, it is observed that developers have put more focus into products’ design, facilities, finishing materials to better meet demand from increasingly discerning clients. More effort has also been put into sales and marketing strategies.
In terms of market segmentation, mid-end segment accounted for 64% of total new supply in 2017 (compared to 40% in 2015), showing movement of the market to serve more end-user, laying foundation for a more balanced residential market. In terms of location, HCMC’s condominium market continued to expand towards the East and the South, with high concentration of new projects in districts 2, 7, 9 and Binh Thanh district.
Sales performance has been positive in both Q4 2017 and for the whole 2017. In Q4, 8,934 units were sold, an increase of 23% q-o-q and decrease of 29% y-o-y. Total number sold units in 2017 was estimated at 32,905, a decrease of 5% y-o-y, but this is the first time in the past 5 years that the market recorded total sold units outnumbering total new units. Average sold rates of newly launched projects was recorded at 75%. High sold rates from 90% to 100% were observed at projects from reputable developers with prime locations, such as Empire City, d’Edge Thao Dien, Saigon South Residence, Lavita Charm, Mizuki Park... The mid-end segment accounted for 60% of total sold units in 2017.
Average selling price from developers in Q4 2017 was recorded at 1,564 USD/sm, an increase of 4.8% q-o-q while a decrease of 3.6% y-o-y. The y-o-y decrease was due to more supply of mid-end units in Q4 2017. For the whole 2017, average price reached 1,558 USD/sm, an increase of 4% compared to 2016. High-end segment recorded a y-o-y increase of 4% in selling price thanks to introduction of high-quality products such as d’Edge, Tilia Residence (Empire City), Sunwah Pearl, Diamond Island.
In 2018, it is forecasted that mid-end segment will continue to account for the biggest proportion of the market, while high-end and luxury segments will observe more considerate new supply, helping the market to develop more sustainably. The East and South will continue to be hotspots of the market, with more new launches in districts 2, 7, 8, Binh Thanh such as One Verandah, GEM Riverside, Midtown, High Intela, Green Field. Average selling price in 2018 is expected to increase by 3%, with high-end and luxury segment showing increase of 5%, and mid-end and affordable segment increasing with a lower rate of 1.5%.
Contact me for project information