Vietnam News/ANN: The domestic real estate market in the fourth quarter of this year is forecast to see the strongest increase in transactions in the year, higher than the transaction volume in the same period last year.
Nguyen Van Dinh, deputy chairman of the Viet Nam Real Estate Brokerage Association, made the prediction at the association’s press conference on reviewing real estate transactions in the domestic market in the third quarter of this year in Hanoi on October 11.
In the fourth quarter, the market will continue to see diversification in the kinds of property products on offer, says Dinh. Demand for housing and investment in the real estate sector will continue to see growth because the economy is expected to remain stable.
Meanwhile, foreign direct investment (FDI) may continue to flow to Vietnam as investors are tending to withdraw from the Chinese market due to concerns over the US-China trade war, according to the association.
Prices of properties in Hanoi and Ho Chi Minh City were stable compared to the second quarter while about 13,000 products were traded successfully, bringing the absorption rate to 63.5 per cent.
A large number of buyers had real demand for property products, showing no sign of a real estate bubble.
In Hanoi, affordable condominiums accounted for 54 per cent of total traded apartments while in Ho Chi Minh City, high-end products dominated the market with 40.5 per cent, followed by mid-end with 36.5 per cent.
According to the Savills Property Price Index (SPPI) released on October 11, the residential index in Ho Chi Minh City’s residential market reached the highest level for the last five years at 96, increasing 1 point quarter-on-quarter (QoQ) and 3 points year-on-year (YoY).
Total transaction volume on the southern market surged to approximately 14,400 units, up six per cent QoQ and 22 per cent YoY.
Absorption reached a five-year high at 56 per cent, up nine percentage points (ppts) QoQ and 24 ppts YoY. The strong performance was due to increasing sales from new Grade B and C projects. Grade B transactions had the highest growth of 31 per cent YoY.
Until 2020, Grade C is expected to account for 62 per cent of future supply.
With high demand, developers will deliver Grade C units in western and outlying districts.
Meanwhile, in Q2/2018, The Residential Index of the Hanoi property market increased by less than one point (pt) QoQ and decreased one pt YoY to 104.81.
The average selling price was US$1,196/sqm, up 1 per cent QoQ.
The average absorption rate was 27 per cent with sales reaching approximately 7,500 units, up 31 per cent QoQ and 11 per cent YoY. Grade B dominated with a 59 per cent share or 27 per cent absorption, whilst Grade C performed well with 38 per cent of sales. Grade A transactions decreased due to limited available stock and high asking prices.