What do you think are the most distinctive aspects of these residential markets?
We should first find out the critical difference between Northern and Southern consumers. People in the North are often conservative and tend to focus on landed investments as long-term assets. People in the South, though still careful, have a slightly different approach to business and spending.
For example, in five to ten years ago, the only two seriously considered residential products in Hanoi were landed property and community housing, which were favored due to land values. Hanoi's residential market only focused on low-rise developments, and the apartment sector really got going in the last four years. Apartments and landed properties have been developing at the same pace in HCMC, a trend influenced by international organizations and companies entering the market.
Some say the residential market of HCMC is ahead of Hanoi. What is your opinion?
Yes, and no. HCMC is a dynamic, rapidly developing city that attracts significant foreign investment. This has advantaged the residential market in expanding to new locations, innovations in residential products with more facilities, opening sales offices and show units. Hanoi residential market is quickly adapting to all these.
However, it should be noted that Hanoi restrains the height of buildings, especially in the four central districts. This characteristic has led the residential market there to a different path, so it is not correct that Hanoi is behind.
What are the similarities and differences in the residential market performance between Hanoi and HCMC? What has created the differences?
2017 was a stable year for the residential market in both cities. The demand for Class B and C apartments remained high, while Class A sales improved considerably. Villa and townhouse absorption also increased impressively over 2016.
Another similarity is both are expanding rapidly with the accelerating urbanization rate. We can see both local authorities develop infrastructure and transportation systems to support the increasing urban population. The improved transport connections will undoubtedly draw investment into real estate and will benefit residential development in both cities.
Talking about differences, in 2017, HCMC was ahead of Hanoi in affordable housing. This segment always gets particular attention as it is to meet the demand of the largest part of the population. The number and quality of affordable housing projects in HCMC were improved, which boosts more sales. Hanoi's affordable housing segment only started to be more exciting last year after large investors announced their involvement.
While landed property in HCMC saw positive performance in 2017, Hanoi's supply remained abundant, as the market mainly focused on apartments, villas, and townhouses in the inner city.
What is your forecast for the two housing markets in 2018 and the future?
Each market has its characteristics, so it is unlikely that they will follow the same pattern. However, rather than those differences, it is what makes each unique and attractive to developers, investors, and buyers that separate them.
Undeniably, HCMC has numerous advantages and often leads the trends. Visionary investors in the North could choose to invest in HCMC's residential products, and learn to adapt the trends in HCMC to Hanoi for more structured development.
Thank you very much!