Real estate market warms up, but prices unchanged

A report of CBRE Vietnam showed that 10,340 apartments were offered to sell in the fourth quarter of 2015 in HCMC, an increase of 28 percent over the quarter before. The supply mostly came from the eastern part of the city. 

About 10 apartment projects are under construction or will be implemented in the near future, located along the subway route No 1. They would provide 3,500 apartments, slated for late 2017.

There would also be some apartment blocks alongside the East Belt which connects Phu My Bridge and Hanoi Highway.

Le Hoang Chau, chair of the HCMC Real Estate Association (HoREA), commented that the information about subway No 1 has helped turn the housing market more bustling. 

The apartments located near the subway are believed to have the selling price of around VND1 billion for each product. There is no considerable difference in prices of the apartments in the area.

The plentiful supply is cited as the reason why real estate developers daren’t raise the selling prices, despite the demand increase.

Nguyen Nam Hien, Hung Thinh Land’s CEO, confirmed that no one would raise the selling price in the current context of supply, or the products would not sell.

However, slight increases still have been announced for some projects. The Eastern apartment block in district 9, for example, has increased by 3-5 percent in price if compared with 2013. This is because buyers can exploit the apartments for profit by leasing them after legal procedures have been completed.

NHO, the investor which now develops First Home Khang Viet project, also decided to raise the selling price from VND15.5 million per square meter in September 2015 to VND16.5 million in January.

An analyst noted that apartment prices increased very modestly by VND1-1.5 million per square meter in the last six months.

When asked about pricing policy, Chau from HoREA said the price trend is still unclear because real estate products bear high impact from changeable state policies, which may cool the market.

The ‘policies’ Chau mentioned may include amendment of Circular 36 the central bank plans to make. 

It is expected that commercial banks’ lending to the real estate sector would be tightened to ensure safety for banks’ operation.

After the long Tet holiday in February, many real estate developers said that they would not inject money into too many projects, and would focus on boosting sales.