, Vietnam

Vietnam’s new apartment supply up 73% amidst third wave of pandemic

There were 3,900 new units launched in Q1.

Inspite of the third Covid wave in February, JLL says Ho Chi Minh City’s new official apartment supply in 1Q21 increased 7% q-o-q 73% y-o-y with total of 3,900 units, thanks to the issuance of new guidelines for legal issues. 

The new launches were highlighted with the introduction of a Luxury project - Cove Residences with 136 units. Mid-end sector, represented by Vinhomes Grand Park and Sunshine Diamond River projects, continued to dominate the newly launched basket with 80% in sum. Lack of land banks in the inner city and the continuously improving infrastructure systems have increasingly driven housing demand in the suburban areas. 

Here’s more from JLL:

In 1Q21, the total take-up was at 3,932 units, up by 98% y-o-y. The cumulative sales rate for the apartment sector has remained high at over 85% since 2017, showing a strong demand in the sector with most of buyers being the first-time homeowners who are either the local or outer provincial citizens. Meanwhile, since Covid 19 has limited the capital flows into the manufacturing sector, and lending rate was kept low to stimulate economic growth, the residential segment has appeared to be attractive for developers/investors, and thus boost transaction activities. 

The upward trend still leads the market price 

The overall primary price reached USD 2,468 per sqm in 1Q21, stabilized q-o-q, and increased 0.7% y-o-y as the majority supply from the mid-end basket with reasonable prices and standardized quality favoring by mainstream buyers such as D'Lusso, ST Moritz, Eco Green Saigon. Notably, in the quarter Masterise Group just soft launched its Grand Marina project at USD 16,000 per sqm, an all-time high level in the market. 

Outlook: Bright future for suburban area 

DONRE has submitted a proposal to resolve legal issues for real estate development , which will likely boost the total supply in 2021 to between 20,000 to 25,000 units, most of the projects located in the suburban area toward the East and the South corridors. Lack of land bank and limited supply in inner-districts shifted both supply and demand to the suburban area where there was a large land bank and improving transportation network. Primary price keeps increasing in line with market sentiment. The introduction of integrated development projects with various necessary facilities will bode well for the creation of communities in suburban area, hence, drive the market sentiment toward sustainable mode.


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