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Property

Explosion in Hanoi's apartment segment in Q4 2018

Released at: 15:51, 10/01/2019

Explosion in Hanoi's apartment segment in Q4 2018

Photo: Ngoc Lan

New supply up 120% in fourth quarter, according to latest Savills report.

by Ngoc Lan

Hanoi’s real estate market saw an explosion in the apartment segment in the fourth quarter of 2018, reaching a record in new supply, according to Savills’ quarterly report released on January 8.

The report noted that eight new projects and the next phases of 28 projects provided approximately 15,100 units, up by some 120 per cent quarter-on-quarter and year-on-year.

Transactions rose 81 per cent quarter-on-quarter and 69 per cent year-on-year, while the absorption rate increased by 9 ppts quarter-on-quarter and 5 ppts year-on-year to 34 per cent.

The average asking price was $1,370 per sq m, up 3 per cent quarter-on-quarter and 10 per cent year-on-year. The mid-end accounted for 61 per cent of stock, followed by the low-end with 31 per cent.

The report also forecast that more than 41,300 units will enter the market in 2019 from 36 projects, mostly mid-end.

Mr. Troy Griffiths, Deputy Director of Savills Vietnam, said that apartments with reasonable prices and small areas will receive the most attention in Hanoi this year.

In Ho Chi Minh City, meanwhile, 23 new projects and 13 next phases of active projects supplied over 9,500 units in the fourth quarter. There were over 18,300 primary units, down 3 per cent quarter-on-quarter and 44 per cent year-on-year.

Sales were over 11,000 units, up 10 per cent quarter-on-quarter but down 27 per cent year-on-year. The absorption rate peaked at 60 per cent, up 7 ppts quarter-on-quarter and 14 ppts year-on-year. The low-end was the main driver, with 58 per cent of transactions and an absorption rate of 64 per cent.

To 2021, over 154,000 units from 100 projects are to launch, 66,000 of which are expected to enter the market this year.

Regarding Vietnam’s economy, the report noted that GDP growth reached 7.1 per cent last year, bolstered by strong manufacturing and exports. The expansion of the service sector was robust, supported by private consumption and record tourist arrivals. National retail sales of goods increased 12 per cent year-on-year to $145 billion.

Total export value in 2018 exceeded $244 billion, resulting in a trade surplus of $7.2 billion. FDI sectors accounted for over 70 per cent of export value, with the US remaining the largest market.

Though total registered FDI decreased slightly in 2018, by 1 per cent year-on-year, disbursed FDI increased 9 per cent to over $19 billion.

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