New apartments, new villas, and rising house prices everywhere

Day post: 09-01-2017
Vietnam is flooded with new construction, and its real estate market is sizzling hot.  Boosted by recovery from the housing bust of 2009-2013, by a booming economy, and by the Housing Law and the Law on Real Estate Business (effective July 1, 2015), which allows foreigners and overseas Vietnamese to legally own, sell and transfer real properties (subsequently fleshed out by Decree No 99 (effective December 10, 2015) and by Circular 19 (effective August 15, 2016)), real estate prices in Vietnam have been rising rapidly.

The law - and the subsequent liberal decrees - are hugely important.  And the result has been a boom.

In Q3 2016, total dwelling sales in HCMC surged by 49% from the previous quarter, and by 193% from the same quarter last year, according to Savills World Research.  Most of the sales were of townhouses, which accounted for 71% of total transactions.
In Ho Chi Minh City (HCMC) primary market apartment prices rose by 7.4% during the year to Q3 2016, according to Jones Lang LaSalle.
HCMC secondary market apartment prices rose 7.5% y-o-y

Villas and townhouses in HCMC also had strong annual price hikes in Q3 2016.
The average asking price of villas and townhouses in the primary market rose by 6.8% y-o-y.
In the secondary market, asking prices of villas and townhouses increased by 8.5% y-o-y.

HCMC's affordable newbuild segment prices rose most q-o-q (2.2%), but the secondary market has slowed, due to the massive new supply.

Condominium sales transactions in HCMC rose by 33% q-o-q in Q3 2016, according to Colliers International. The mid-end segment accounted for 55.8% of total sales, followed by the high-end segment with 29.8%.

In Hanoi, the country's capital, apartment prices also saw robust y-o-y growth in Q3 2016, according to Jones Lang LaSalle:
Hanoi's primary market apartment prices rose by 8% during the year to Q3 2016.
Hanoi's secondary market apartment prices rose 5.3% y-o-y.

Hanoi's Premium segment had the highest q-o-q price growth of 3.6% in Q3 2016.  Condominium transactions in Hanoi rose by 10.1% from the previous quarter, to around 5,450 transactions across all segments, according to Colliers. The mid-end and high-end segments had respectively 51.4% and 36.7%  of sales in Q3 2016.   Although secondary apartment prices are still rising, their growth is slower than in previous quarters, at 1.1% q-o-q, down from the 1.5% quarterly average since Q1 2015.

The average asking price of apartments in the primary market was around US$ 1,500 per sq. m., while it was a little over US$1,000 per sq. m. for secondary apartments. Apartments in the affordable segment can be bought at less than US$1,000 per sq. m. Mid-end apartments are at U$ 1,500 per sq. m., while Premium apartments cost more than US$ 2,000 per sq. m. Luxury apartments could cost more than US$ 4,000 per sq. m., according to Jones Lang LaSalle.

Jones Lang LaSalle predicts a continued property price hike in both HCMC and Hanoi. In HCMC, stronger investment is expected in the succeeding quarters especially in the villa and townhouse sector. In Hanoi, sales are seen to rise due to the expected supply increase, which in turn, is also backed by homebuyers.

Foreigners are not allowed to own land. In fact, even citizens are not allowed to own land. In Vietnam, land is theoretically collectively owned by the people, but regulated by the State.

Foreigners who are residents in Vietnam are permitted to purchase dwelling houses. They can own a house but not the land on which it is built. They have the option to lease the land from the State.

source: globalpropertyguide.com
Tags:

Comment