16:30 (GMT +7) - Tuesday 25/06/2019

Property

HCMC's east to lead pipeline in 2019

Released at: 17:40, 02/04/2019

HCMC's east to lead pipeline in 2019

Photo: Hung Cao (VET)

Area holds major potential for residential development, according to CBRE Vietnam.

by Hong Nhung

There were 4,423 newly-launched units in Ho Chi Minh City in the first quarter of 2019, a decline of 54 per cent year-on-year, according to CBRE Vietnam, perhaps attributed to the government’s tightening of credit in real estate as well as a more stringent process in granting approval to new projects. The pipeline in 2019, however, is still at a strong level.

Given the limited new supply, inventory was absorbed positively, evidenced through busy activities at recent sales events. There were 5,924 units sold in the first quarter of 2019, 1.3 times higher than new supply. With the emergence of some luxury projects in the first quarter, average prices stood at $1,764 per sq m, an increase of 15 per cent year-on-year.

The east, which possesses a large land bank, is a major development hotspot in Ho Chi Minh City right now, as major infrastructure projects are going eastward, such as Metro Line No. 1 and Long Thanh International Airport. The area is expected to lead the market in terms of new supply over the remainder of 2019, thanks to launches of large-scale projects. Interest in the area remains strong, especially in projects near to future metro stations.

A report released by CBRE early this year also highlighted that these infrastructure improvements have significantly changed the development landscape in Ho Chi Minh City’s eastern area since 2012.

In terms of location, given the lack of land availability for residential developments and the difficulties in obtaining freehold tenure, new supply in central districts (including Districts 1 and 3) has been limited. Recent developments have tended to concentrate on neighboring areas such as Districts 2, Binh Thanh, 4 and 7. The southern area ranked first in terms of new supply in 2018 (with 53 per cent), thanks to mid-end and high-end projects in Districts 7, 8 and Binh Chanh. The eastern area accounted for 29 per cent of new supply, with the majority in District 2.

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