Ho Chi Minh City’s scarce apartment launches hit Q1 figures

A corner of Ho Chi Minh City. (Photo: baoxaydung.com.vn)

The steep drop was largely caused by low inventory, administrative delays, and changes in developers’ plans, real estate services provider Savills Vietnam said in a freshly-issued report on HCMC market developments in the first quarter of this year.

The firm claims that there were a total of 4,500 primary units added to the market, down 38 per cent on quarter and 27 per cent on year. Meanwhile Grade C was the largest primary supplier with an 85 per cent market stake, mainly located in suburban areas, including Districts 8 and 9.

Quality supply that is able to deliver will be quickly absorbed, said Nguyen Khanh Duy, Director of Savills Residential Sales.

Meanwhile, primary sales posted a plunge. In total there were approximately 6,400 sales, falling by 42 per cent on quarter and 52 per cent on year. These drops were partly caused by national holidays in January and February.

Absorption was 53 per cent in the first quarter, up 5 percentage points on year. New projects accounted for 46 per cent of sales while suburban districts such as District 8, Tan Phu, and Binh Tan dominated the market. One to two-bedroom apartments continued to be highly sought-after as they meet both end-user and investment demand.

With limited primary launches, secondary prices are now on the rise. According to Savills, local authorities expect current administrative delays to be normalized in 2019.

Projects with a clear master plan are increasingly desired by prospective purchasers.

Foreign purchasers are pinning their interest on high-end projects, with the 30 per cent foreign quota quickly filling up.

This trend is predicted to continue, with higher price points expected across all grades. Grade C in particular will continue to dominate and lead the way in the domestic market.