By our experts from Residential SalesSavills Vietnam (from Portfolio – Savills Vietnam Residential Sales – 2H.2018)
THREE PICKS FROM VIETNAM
Our local experts give an update on the markets across Vietnam in 2018
“The real estate market has seen lots of exciting activities in both Hanoi and Danang in 2018.
In Hanoi, Grade B residential projects, especially villas, townhouses, semi-detached townhouses and shophouses, are very well received. However, despite such enormous demands within the market, there is a proven shortage in supply of this sectors.
Beside, Grade A projects are operating relatively well in the first half of 2018 in Hanoi. Due to high urbanization rate, convenient transportation, improved infrastructure and enormous commercial potential, the market has witnessed spectacular breakthroughs in prices throughout the year. Investors, hence, are expecting the growth of the luxury developments, especially in such “booming” market like Vietnam.”
“Meanwhile the Danang market, the land segment is really active and lively. 2018 is also the year that Savills noted numerous demand and request from customers looking for second home products. Investors are showing changes perspectives of second-home market in general and this segment in Danang in particular. Those projects that offer rental guaranteed programs will no longer be optimal product line. In contrast, pure, straight-forward property products with the potential for value appreciation and clear-cut ownership are signaling its return.
Customers, therefore, are looking forward to further quality and transparent products in Danang in 2019. Investors are also expect more urbanizing developments in Danang rather than just hospitality products.”
Mr. Duong Duc Hien
Director, Residential Sales, North and Central Vietnam, Savills Hanoi
HO CHI MINH CITY
“The potential of the luxury residential project in HCMC is great. In fact, the demand for penthouse or million-dollar villas these days has been escalated for the previous period. We are now find struggles in finding stocks for the high-end residential customer segment. Beside high requirements in location, exclusive design, ideal living environment, comfortable living space, privacy and security, prestigious developer, high-end furniture, a luxury residential product must match the the taste of its owner. However, there is limited supply in this sector. The average price of this sector in HCMC is relatively lower in comparison to other markets such as Singapore, Hong Kong, Bangkok, Tokyo or Taipei. In general, limited supply, increased demand and the potential of this sector do not simply reflect the housing demand of HWNIs. It also means that HWNIs are actually looking for an ideal investment channel for capital appreciation.”
Mr. Nguyen Khanh Duy
Director, Residential Sales, Savills HCMC
“The number of foreign and local investors interested in HCMC’s residential real estate market has increased tremendously in recent years due to a growing middle class/economy, an increase in reputable developers entering the market, and loosened housing regulations making the purchasing process easier for foreigners. However, we have seen a considerable decline in new product launched this year compared to 2017 which is easing some concerns of oversupplying the market. In addition, with the lack of available land and new construction in core areas of HCMC and the government’s decision not to approval any new construction permits in District 1 until 2020, price per square meter for newly built in these districts is at an all-time high. Investors buying into these districts anticipate lowering their investment risk as they view the overall location as very stable. As such, nearby districts such as District 2, 4, 7, and 9 are benefiting the most as demand remains very strong. Overall, investors are still very confident in Vietnam as a potential alternative investment destination for its attractive entry price, potential for capital appreciation, and attractive rental yields.”
Ms. Sunny Hoang
Associate Director, International Residential Sales, Savills HCMC