19:52 (GMT +7) - Tuesday 25/04/2017

Property

Steady foundations

Released at: 08:00, 28/01/2017

Steady foundations

Photo: Viet Tuan

Some segments did better than others in Vietnam’s real estate sector in 2016 but overall trends are positive.

by Hong Nhung & Ngoc Lan

It’s generally agreed that 2016 was a dynamic year for Vietnam’s real estate market. Mr. Nguyen Manh Ha, Deputy Chairman of the Vietnam National Real Estate Association (VNREA), told the “Prospects for the Real Estate Market in 2017 - Impact of Policy” conference held in Hanoi in late December that the country’s real estate market saw steady development in all segments during the year, with particularly strong growth in the high-end and luxury segments.

Healthy year

The property market picked up in number of units launched and sold, according to Mr. Stephen Wyatt, General Director of JLL Vietnam. There were 40,000 units launched across all segments in Ho Chi Minh City, an increase of 62 per cent year-on-year, and 35,000 units sold across all segments, up 45.5 per cent. In Hanoi, approximately 36,700 units were launched across all segments, an increase of 30 per cent year-on-year, and 33,600 units sold across all segments, 19 per cent higher.

New supply and sales in the condominium for sale market continued to be strong, with major developments by Vingroup, Son Kim Land, Novaland, Keppel, and Capitaland in Ho Chi Minh City, according to Ms. Nguyen Hoai An, Director of Research, Consulting and Asset Management Services at CBRE Vietnam. Hanoi, meanwhile, saw ground broken at new sites in prime locations such as Lieu Giai and Giang Vo Streets in the mid-town area and Tran Duy Hung Street in the west. 

According to a Savills Vietnam report on the third quarter, eleven new projects and the next phase of one active project were launched in the condominium for sale market in Ho Chi Minh City, supplying more than 4,600 units, down a significant 47 per cent quarter-on-quarter. There were approximately 40,300 available units across all grades. Sales reached 7,500 units, an increase of 7 per cent quarter-on-quarter and 43 per cent year-on-year. 

In Hanoi, total primary stock was 17,000 units, down 2 per cent quarter-on-quarter but up 16 per cent year-on-year. Thirteen projects with fresh launches and ten newly-launched projects supplied 5,700 units, down 6 per cent quarter-on-quarter. There were approximately 5,700 sales, a decline of 6 per cent quarter-on-quarter and 15 per cent year-on-year. 

According to Ms. An, the market also welcomed new players with major projects, such as Maeda in Ho Chi Minh City and the Sunshine Group and the Sun Group in Hanoi. Regarding second home developments, Da Nang, Nha Trang, and Phu Quoc Island continued to be hospitality hot spots. New supply and sales of condotels surged in Nha Trang and Da Nang. Ha Long city and Sapa have also emerged in the sector, with significant projects including FLC Ha Long and Sapa Jade Hill. 

Large property developers such as the BIM Group, the Sun Group, Vingroup, and the CEO Group also entered the race to develop luxury resort properties on Phu Quoc Island in 2016. Da Nang remains on the radar for foreign investors in the hospitality market due to its long, white-sand beaches and increasing international connectivity. The city has pioneered luxury coastal homes and is second behind Nha Trang in total available property, with 1,199 villas and 3,367 apartments, according to a recent report from Savills Vietnam.

Last year also saw more foreign players becoming involved in merger and acquisition (M&A) deals. Notable M&As included Low Keng Huat, a Singapore-based group, selling the Duxton Hotel Saigon in Ho Chi Minh City’s District 1 to New Life RE for approximately $49 million, the Kumho Asiana Plaza Complex in Ho Chi Minh City being sold to Singapore’s Mapletree Partner Investments Pte Ltd. by the Kumho Industrial Company Limited, and the sale of the Sofitel Legend Metropole Hanoi.