Hanoi apartment supply posts record low over past five years

16-Jul-2019 Intellasia | Hanoi Times | 6:02 AM Print This Post

Only 5,900 units opened for sale in the second quarter this year.

The newly-launched apartments in Hanoi in the second quarter (Q2) this year were only 5,900 units, the lowest additional supply in a quarter since the market rebounded in 2014.

The number is equal to nearly half of the Q1 figure, a recent report by JLL has shown, pointing that most of the additional stock came from the subsequent phases of existing projects.

Most of the newly-launched projects are small scale with less than 500 units each.

In Q2, the take-up was more than 4,660 units, 65.3 percent lower on quarter in tandem with the supply slump.

Indeed, the slower investor demand became more visible after a period of strong growth while the demand from owner-occupiers remained healthy. Meanwhile, the widespread trend of increasing interest rate and stricter loan assessment process amongst commercial banks prevented buyers in accessing the mortgage.

The concept of smart home was appreciated on the market recently. It is observed that the sale rate of units with smart function was typically higher than that of traditional unit type on the same project.

On a project basis, primary prices maintained flat or slightly improved after a period of strong growth. Chain-linked growth in prices recorded at 0.5 percent on quarter and 6.9 percent on year.

Unfavourable market sentiment owing to tightening loan assessment process has prompted developers to introduce more sale incentives scheme to offload stocks, while kept the price unchanged.

Most applied sales strategies included extended payment periods and discount programmes from 3 percent to 6 percent on unit price for early payment.

Outlook for the rest of 2019 is that the supply is subject to greater uncertainty, varying between 10,000-15,000 units.

The affordable and mid-end segments which are open for owner-occupied demand will remain the key contributors in the second half.

Meanwhile, new launches of the luxury segment in the near and medium terms will be absent from the market as stricter lending regulations regarding high-end projects coupled with a scarcity of prime freehold land bank in the central business district (CBD) are giving developers a pause.

Resale activity will remain lukewarm as buyers become more cautious and selective due to consideration for economic growth, according to the global real estate services firm.

http://www.hanoitimes.vn/economy/2019/07/81E0D969/hanoi-apartment-supply-posts-record-low-over-past-five-years/

 


Category: Business, Vietnam

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