(VEN) - The domestic real estate market showed optimistic signs in the first quarter of 2015. Many segments experienced better sales, with successful transactions strongly increasing in both Hanoi and Ho Chi Minh City.
Photo: Can Dung
Breakthrough transactions Surveys carried out at some real estate trading centers in Hanoi in early months of this year showed an increase in buyer demand compared with previous years. Statistics from the Vietnam Real Estate Association show that until February 15, Hanoi saw about 1,550 successful transactions in the real estate market, nearly triple compared with the same period of 2014. The real estate market in Ho Chi Minh City has also been vibrant since the beginning of this year. On March 5, the Hung Thinh Real Estate Trading and Investment Joint Stock Corporation introduced a sample apartment in its high-grade Sky Center apartment project, at 10 Pho Quang Road, Tan Binh District, Ho Chi Minh City, to more than 300 customers. The corporation’s general director, Nguyen Nam Hien, said that nearly 50 Sky Center apartments had been bought. The real estate market has attracted the attention of not only those who have real demand for housing but also investors. Since the beginning of 2015, the Hoang Anh Saigon Real Estate Company Limited (HASR) has sold nearly 200 apartments to customers who borrowed from the VND30 trillion loan package. A recent report of Savills Vietnam also indicated optimistic signs of the real estate market; in the fourth quarter of 2014 real estate companies in Ho Chi Minh City sold about 4,130 apartments, a rise of 28 percent compared with the same period in 2013 - this was the highest transaction volume in a quarter since 2010. In Hanoi, the house price index considerably increased in the fourth quarter of 2014 while inventories fell.
In the first two months of this year the domestic real estate market attracted over US$111 million of foreign direct investment (FDI), equal to 77.5 percent of that in the first quarter of 2014. Some investors have withdrawn their capital from the securities market to invest in real estate. The real estate market is attracting not only big investors.
Positive changes continue Construction Minister Trinh Dinh Dung predicted that the real estate market would continue to undergo positive changes and inventories would decrease. Notably, apartments of projects with good infrastructure, which are not very far from the centers of the two cities and the construction of which has shown good progress, are predicted to sell well. However, most apartments which remain unsold are big-sized and located far from the centers of the two cities and still lack infrastructure. In the next quarters of 2015, low-priced apartments are predicted to continue attracting customers. However, real estate experts forecast that the demand for medium-priced apartments will remain high. Investors will restructure their products to have more medium-priced apartments for sale. Thu Duc Housing Development Joint Stock Company (TDH) General Director Le Chi Hieu believed that the real estate market would regain investor trust and gradually recover in the near future. Dat Xanh Group Chairman Luong Tri Thin said that the group pursued the goal of selling 10,000 units this year. To create long-term capital resources to achieve this goal, the group has signed a comprehensive cooperation agreement with the Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank), under which VietinBank pledged to provide Dat Xanh with credit loans totaling VND20 trillion over five years from 2015 until 2020 (VND4 trillion each year). Many land and housing experts believe macroeconomic stability and the recovery of the real estate market would create an impulse for the market in 2015.
CBRE Vietnam Managing Director Marc Townsend said, “2014 saw positive changes in the Vietnamese economy and the real estate market will create a bright outlook for the economy in 2015.”