According to Savills real estate consultancy, in 2017, the number of apartment transactions reached more than 47,000 units, higher year-on-year. The landed property market has robust absorption rates driven by the completion of new infrastructure and the rapidly growing middle class, which has performed in line with Savills' forecasts. The market should remain healthy in 2018, with strong demand from owner-occupiers and the highest rental yields in the region.
The residential market is evolving towards more owner occupiers and less speculation, which is all healthy and a positive sign for the market. Although the formation of a significant affluent class is creating opportunities for mid- and high-end products, the mass market is benefiting from the rapid growth of the middle class.
The demand for affordable housing continues to increase rapidly in megacities like Ho Chi Minh City (HCMC) and Ha Noi. In the first three quarters of 2017, the number of grade C transactions in HCMC accounts for approximately 60% of the total figures, increased from 48% in 2016. The availability of bank finance for the growing middle class, accompanied by a stable mortgage rate, will encourage the continued rise of the affordable segment in 2018 and beyond.
Apart from the strength of the residential market, the excellent performance of the office market has been recorded with occupancy rates reaching over 95% in HCMC and accelerating rental growth, particularly for grade A products. The top potential tenants are from the F.I.R.E sector (finance, insurance, and real estate related demand), followed by manufacturing related demand.
The hotel segment has also performed well, driven by strong HCMC’s visitor growth of approximately 6.3 million, up 23% year-on-year. In 2018, Savills anticipates new excitement around the various integrated resorts, notably Hoiana, located only moments from the historic old town of Hoi An, with its Vietnam’s largest casino, opening in 2019. The Ho Tram Strip, only a two-hour drive from HCMC, also continues to grow in popularity.