Experts warn of apartment oversupply in city
Though the number of apartments sold in HCMC this year has surged, experts have warned of a housing oversupply in the city due to a race among property firms to invest in new projects.
The property market here in the city has seen many property projects launching new products in November alone.
In the middle of this month, Gia Hoa Co. Ltd. started selling apartments of Block Picasso at The Art apartment project in District 9. The project consists of ten blocks of 18 floors.
Thanh Yen Land has launched model apartments of Depot Metro Tower-Tham Luong invested by Minh Nguyen Long Co. in District 12. This project is part of the Metro apartment chain and comprises two 15-floor blocks with units of 57-70 square meters.
Hung Thinh Corp.’s Lavita Garden project in Thu Duc District and near the Ben Thanh-Suoi Tien metro line has also been introduced to customers. Two 20-floor blocks of Lavita Garden will supply the market with 648 units measuring 50.37 to 71.68 square meters.
Saigon Thuong Tin Real Estate Co. has unveiled thousands of apartments at many projects like the Jamona urban area in District 7, Charmington high-end apartments in District 10 and Carillon mid-end apartments in Tan Binh and Tan Phu districts.
Property enterprises have launched more products to cash in on the recovery of the real estate market. A large number of property products were marketed in September and October in the city.
At a seminar held by Forbes Vietnam magazine in HCMC on Tuesday, experts forecast the property market would grow strongly this year.
Data of CBRE Vietnam showed around 24,000 apartments in HCMC were sold in January-September, well above 17,000 units last year.
In addition to good liquidity, this year has seen busy transactions in all segments and different localities including projects far from the downtown area.
According to experts, the recovery of the property market has been supported by marco-economic stability, ongoing construction of metro lines and upgraded transport infrastructure.
Homebuyers have found cheaper loans with longer terms. In addition, regulations on property trading and ownership have been relaxed. However, experts have warned that an oversupply is looming.
According to a survey of Savills Vietnam, supply of housing products in HCMC late this year and early next year will reach some 57,500 units.
CBRE Vietnam said HCMC’s absorption rate declined to 35% in quarter three when 10,000 apartments were offered for sale.
Le Anh Tuan, head of research at Dragon Capital, said the property market has entered a new, better cycle of development.
However, next year’s scenario for the market might not be as good as expected due to an abundant supply. If the absorption rate keeps falling, an oversupply will be inevitable in the coming years.