The condominium market for sale showed signs of slowing down in the second quarter of this year. (Photo: vneconomy.vn)Hanoi (VNS/VNA) - The condominium market for sale showed signs ofslowing down in the second quarter of this year, said Nguyen Hoai An, directorof CBRE Vietnam’s Hanoi branch at a recent press conference to report on thecapital city’s real estate market in the second quarter of this year.
In the second quarter, there were 6,534 units launched from 19 projects in Hanoi,down by 20 percent year-on-year. Launched projects in this quarter are mostlylocated in the West and North of the city, accounting for 53 percent and 25 percentof total new launched units, respectively.
Notably, there were three new projects in the high-end segment includingD’Eldorado 2, Starlake and Vinhomes West Point, all located in a primeposition, which drew positive market attention.
However, the share of the high-end segment increased from 15 percent in thefirst quarter of this year to 37 percent in the second quarter.
In terms of sales performance, 5,900 units were sold during the second quarter,down by 22 percent from last year.
The second quarter of the year is the time when developers typically reviewcurrent products and prepare for new products to launch at the end of theyear. The slower launching speed also allows the market to absorb unsoldunits, An said.
In terms of pricing, the average selling price from developers in the secondquarter of this year was recorded at 1,332 USD per sq.m, down by 0.4 percentquarter-on-quarter but up by 0.4 percent year-on-year.
There were slight adjustments up and down from between 0.3 percent and 1.5 percentacross different market segments during this quarter. The three abovementionedprojects have increased the average primary price of the high-end segment by1.5 percent over last year.
The luxury segment in Hanoi is quite small, so prices were unchanged. Themid-end and affordable segments were more competitive due to the large demandin the market, so prices fluctuated.
“This is a good signal because the market is stable. The second quarter of thisyear is considered as a period of adjustment in the Hanoi property marketbefore entering a new development stage,” said CBRE Vietnam Managing DirectorDang Phuong Hang.
In 2018, CBRE forecasted there would be 32,000 units launched in Hanoi - adecrease of 10 percent from 2017. The decrease in launched supply allows themarket to absorb current inventory, which is a positive signal for the market.This shows that developers are more experienced in developing residentialprojects and analysing market conditions, An said.
In the second quarter, many foreign investors also paid attention to Vietnam’sproperty market, helping local investors raise capital, as lenders and foreigninvestors looked favorably on the real estate industry and interest rates ofloans were on the rise, she said.
Remarkably, An said the local real estate sector has been under great pressurefrom the increase in interest rates of banking loans.
Meanwhile, the State Bank of Vietnam has increased the riskindex of banking loans for the property sector from 150 percent to 200 percent.The risk index could surge to 250 percent in 2019.
The State Bank of Vietnam would reduce the volume of short-term capital usedfor medium and long-term loans from 50 percent to 45 percent in 2018 andpossibly to 40 percent in 2019. Meanwhile, interest rates of banking loans forthe property sector may increase by 1- 2 percent due to higher pressure fromother factors such as oil prices and the increase of the US dollar price, shesaid.
To deal with those difficulties in getting capital, property investors havediversified their capital mobilisation channels such as listing on the stockexchange and issuing international bonds, she said. Those have promised to begood channels to mobilise capital to help the investors not depend on thebanking loans.
Regarding the market prospects, An said in the second half of this year, the Hanoimarket was expected to develop property products with diversification in scale,functions and landscape because the people’s demand for buying condominiumswill continue to grow in the coming time.
The requirements of buyers at present are also different from seven to 10 yearsago. Buyers typically have carefully considered property products beforedeciding to buy one property product. Therefore, the market is expected to havenew property products using clean energy and smart home appliances in thefuture. The price may be stable with fluctuation at 1-3 percent.-VNS/VNA
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