Villa and ground land market in HCM City is flourishing thanks to falling interest rates and banks’ large support for personal spending, according to the HCM City real estate market report in Q2/2012 of Knight Frank Vietnam Co, announced on July 5.
According to Knight Frank Vietnam, Chateau project of Phu My Hung continued to lead the market with new supply of luxury villas following the success of its first offering. District 9 witnessed the official offering of Antigone villa project. These new projects provide a total of 80 additional units in the primary supply in the market.
Despite the strong interest rate supports from banks for individuals to buy houses, the market continued to be quiet during the first half of Q2/2012. Group of home buyers for living was the most vibrant segment with products cost about 10 million dong/m2 (about $500/m2).
Premium segment witnessed an increase in customers’ interest since the announcements to lower interest rates, and especially the deposit rate cut and people have switched their idle funds to other investment assets rather than saving at banks. Most customers focused on some specific locations in District 2, District 7 and District 9 such as Thao Dien, An Phu, Thanh My Loi, Phu My Hung, Phuoc Long B and Phu Huu.
The projects that have been formed and attached to the trade mark of big investors such as Villas Riviera, Riviera Cove, Garland and Chateau received much attention from customers. The products of this segment are being offered from seven billion dong and higher ($350,000/unit). In HCM City, there are now about 500 villas and townhouses ready to be offered and expected to be officially launched in the second half of this year.
Meanwhile, commenting on the service apartment segment in HCM City currently, Knight Frank Vietnam said, in Q2/2012, service apartment market did not have any prominent new projects except 19 apartments of Waterfront Residence project located in District 2.
Times Square, a large complex projects in District 1 has deferred putting service apartments into operation till late 2012. The current average rents for Grade A apartments are about 609,000 dong to 735,000 dong/m2/month (approximately $29 – 35/m2/month) and 400,000 dong to 525,000 dong/m2/month (approximately $19 – 25/m2/month) for Grade B apartments, In Q2/2012, the occupation rate of the service apartments reached about 90 percent for Grade A apartments and about 82 percent for Grade B apartments.
Also in Q2/2012, work was started on a large project in HCM City namely “The One HCM City” being developed by Bitexco Group. This is a complex project including two 55-storey and 48-storey towers with items such as trade centre, office, service apartment and hotel. This project with prime location opposite to Ben Thanh market promises to provide a large supply of luxury apartments to the market once completion.
According to apartment rent division of Knight Frank, the majority of tenants’ budget in this quarter was in the range of $1,500-2,500/unit/month and majority of tenants were Asian people, especially from Korea, Japan and China.