Illustrative image (Source: VNA)Hanoi (VNA) - Residentialreal estate is one of the segments considered by Vietnam Report Joint StockCompany (Vietnam Report) as having strong growth potential in the property market. Accordingly, the new supply and the expectation of a high floor price willincrease profit margins for real estate businesses.
According to Vietnam Report,both supply and demand factors have been on the rise, driven by low-interest rates.
About 3,500 new apartmentswere put on sale in Hanoi’s housing market in the first quarter of this year. Mid-priced apartmentsremained the most popular product in the market, accounting for 66 percent of the newsupply in the period. Demand was higher than the new supply with 4,200 unitsbeing sold.
CBRE property consultantexperts forecast 26,000-28,000 units will be offered this year and most of the newsupply comes from urban areas.
As market sentiment remainspositive, over 90 percent of the new supply will be sold and the primary price willincrease at a more moderate rate of 5-8 percent this year.
Experts of Mirae AssetVietnam Securities Company agreed, saying that the supply will significantlyimprove for the apartment segment this year.
The new housing supply in Ho ChiMinh City is expected to reach more than 20,000 units this year, mainly fromthe handover of existing projects. A series of projects in thesuburbs of the city are planning to open for sale this year, creating the supplyfor the following years.
Analysts believed that thefaster opening of new projects will boost corporate profits this year.
For example, Viet CapitalSecurities Company (VCSC) expects that Classia and Clarita projects willcontribute about 90 percent of the profit forecast in 2022 for Khang Dien House Trading& Investment Joint Stock Company.
As for Nova Real EstateInvestment Group Company, it plans to open for sale one new projectin Dong Nai and two new hotel projects in the central coastal and Central Highlands regions this year and following stages. The expansion in the south and central regionswill take place in the medium term while the investment in the northern marketwill occur in the long term.
In addition to new projectsshowing positive signs from supply in the near future, the fact that the realestate market has not shown any signs of cooling down can also contribute toincreasing profit margins for businesses.
According to a survey by realestate website Batdongsan.com.vn, in the first months of this year, the pricinglevel of many types of real estate has not shown any signs of stabilising eventhough it has simultaneously increased in 2021. The price of constructionmaterials has continuously increased in a short time is also one of the factorscontributing to the high price of real estate, even setting new floor prices insome segments.
The website’s data revealedthat in January, apartment prices in Hanoi and HCM City increased by 4.6percent and 1.8 percent, respectively compared to the average price for thewhole year of 2021./.
