Condominium market in Ho Chi Minh City recorded sustainable growth as the east and south are forecasted to be hotspots

By Dang Hoa - Jan 06, 2018 | 11:25 PM GMT+7

TheLEADEREven though the total new supply of condominium in Ho Chi Minh City (HCMC) showed a decrease last year, good product configuration helps the market to maintain a good absorption.

Condominium market in Ho Chi Minh City recorded sustainable growth as the east and south are forecasted to be hotspots

According to the quarterly report of CBRE, one of the world’s largest commercial real estate services and investment firm, on HCMC real estate market, in the final quarter of last year, the HCMC condominium market welcomed 8,559 new units, 12 per cent higher than the previous quarter. This helped bring total 2017 new supply and accumulated supply calculated to 31,106 and 228,903 units, respectively.

Total new supply decrease assisted the inventory from the two previous years to be absorbed. That was the time developers put more focus into products’ design, facilities, finishing materials to better meet demand from increasingly discerning clients. More effort has also been put into sales and marketing strategies.

In terms of market segmentation, mid-end segment accounted for 64 per cent of total new supply in 2017, showing the movement of the market to serve more end-user, laying a foundation for a more balanced residential market. In terms of location, HCMC’s condominium market continued to expand towards the East and the South, with high concentration of new projects in districts 2, 7, 9 and Binh Thanh district.

Sales performance has been positive in both the final quarter and for the whole 2017. In the final quarter, 8,934 units of condominium were sold, 29 per cent higher than the same period of 2016. This is the first time in the past five years that the market recorded total sold units which were estimated at 32,905 outnumbering total new units. 

Average sold rates of newly launched projects was recorded at 75 per cent. High sold rates from 90 per cent to 100 per cent were observed at projects from reputable developers with prime locations, such as Empire City, d’Edge Thao Dien, Saigon South Residence, Lavita Charm, Mizuki Park. The mid-end segment accounted for 60 per cent of total sold units in 2017.

Average selling price from developers in the final quarter of last year was recorded at US$1,564 per square meter, 4.8 per cent higher than the previous quarter while 3.6 per cent lower than the same period of 2016 due to more supply of mid-end units in the final quarter of last year.

For the whole 2017, the average price reached US$1,558 per square meter. The price of high-end condominium units increased by four per cent within one year thanks to the introduction of high-quality products such as d’Edge, Tilia Residence (Empire City), Sunwah Pearl, Diamond Island.

In 2018, it is forecasted that mid-end segment will continue to account for the biggest proportion of the market, while high-end and luxury segments will observe more considerate new supply, helping the market to develop more sustainably.

The east and south will continue to be hotspots of the market, with more new launches in districts 2, 7, 8 and Binh Thanh district such as One Verandah, GEM Riverside, Midtown, High Intela, Green Field. Average selling price this year is expected to increase by three per cent, with the high-end and luxury segment showing increase of five per cent and mid-end and affordable segment increasing with a lower rate of 1.5 per cent.