Market research firm JLL has just released a report on the HCMC real estate market in the fourth quarter of 2018, with many positive comments. According to the forecast of this company, the supply of market apartments in 2019 is likely to reach more than 45,000 units, with about 85% of them will be absorbed. Apartment price is expected to exceed 5-10% compared to 2018 in the whole market.
Mr. Stephen Wyatt – General Director of Vietnam, JLL said, there are 3 main reasons affecting the price of apartments this year.
Firstly, the supply of the market has shown signs of decline, as the process of approving investment policies and construction permits is slowing down. Recently, Ho Chi Minh City People’s Committee also approved the proposal of the City Department of Natural Resources and Environment on the handling of cancellation and revocation of decisions for 180 projects that did not implement the annual land use plan. This has a direct impact on the new housing supply in HCMC.
The company predicts, this year, the city will still have more than 45,000 officially opened apartments, but most of them come from approved construction projects and launch open sales in 2018.
New supply of apartments in HCMC is forecast to be limited in 2019. Photo: Quynh Tran
Secondly, housing demand in HCMC is still very high. Statistics until the end of quarter IV / 2018, total supply of completed apartments reached 160,000 units in all segments, corresponding to the rate of 17 apartments per 1,000 people.
Thirdly, the increasing value of land and construction costs over the years has put pressure on investors to calculate reasonable selling prices to solve the problem of profits and capital flows.
“We expect housing demand in 2019 will follow the positive momentum of the past year. In the context of positive demand movements, limited supply will certainly affect market prices. “, Stephen stressed.
The report recently announced by CBRE also made similar comments, showing that the price of apartments in HCMC this year continues the upward trend, because the input costs to develop the project are increasing.
The company’s recognition showed that the initial offering price of apartment projects in the last months of the year averaged $ 1,709 per square meter, an increase of 6% compared to the third quarter of 2018 and a 10% increase over the same period last year. last. The price level in fact is increasingly approaching the price used to classify apartments for many years.
For example, luxury apartments are being defined as projects with primary prices averaging above $ 3,500 per square meter or more, but now the market appears new prices that are twice as high as the old ones. High-end apartments with an initial market price of US $ 1,500-3,500 per m2 and the price range of 1,500 are becoming increasingly rare in this segment. Mid-end condominiums range in price from US $ 800-1,500 per square meter, but the prevailing price range is now about $ 1,500 per m2 more.
A recent VnExpress survey showed that in the area of District 2, the cheapest apartment price announced at the time of 11/2018 was 1.8 billion dong, higher than the old project that completed the same area 10- 20%. In the South, especially in District 7, new apartment projects offered for sale or announced to the market recorded the lowest price of VND 39-42 million per m2. The new price zone makes the cheapest products in this area, in the average segment, also immediately jump to VND 30 million per m2.
Apartments in District 7 are having the lowest price of VND 30 million per m2.
The skyrocketing selling price had a strong impact on the resale price of investors. According to representative of Hung Loc Phat – the investor owns a land bank of 30ha in the South – the secondary selling price here is constantly changing. For example, at Green Star Sky Garden, the market has an area of VND 37.5 million per m2, which is 17% higher than the starting price announced by the investor.
“The highlight of Green Star Sky Garden apartment is equipped with health care equipment such as infrared nano bathroom, antibacterial nano paint and air purifier … We predict the price of products will increase high, along with the progress of project completion, “said Mr. Tran Duy Tien – Deputy General Director of Hung Loc Phat Company
According to JLL’s statistics, in the fourth quarter of 2018, Ho Chi Minh City had a total of 8,300 apartments for sale officially – that was allowed to sign sales contracts. Of these, up to 99% of projects have conducted open money sales from the previous 2-3 quarters. Absorption throughout the city reaches 8,800 units, equivalent to the consumption rate of about 95%.
The primary selling price of current projects is stable on a quarterly basis, especially in the high-end and affordable segments. Particularly, the mid-end segment saw an impressive increase from 3% to 6% on a quarterly basis.