Savills’s recent statement reveals Grade-B residential projects in Hanoi, particularly townhouses, villas, semidetached townhouses and shophouses, recorded high sales volum last year. However, while demand for the segments rose, therer was a proven shortage in supply.
Meawhile, Grade A projects in Hanoi also performed pretty well in the first half of 2018, Savills reported. The market saw spectacular breakthroughs in prices throughout the year because of high urbanization rate, improved infrastructure, convenient transport and enormous commercial potential. Savills says investors are expecting the growth of the luxury developments, especially in the booming market of Vietnam, noted the firm.
In the Central coastal city of Da Nang, land segment witnesses an active and lively 2018. Savills reported high demand and requests from customers seeking second homes in the city.
Real estate investors have changed their perspective of the second-home market. At present, projects offering rental guaranteed programs are predicted to no longer be the optimal product line. Meanwhile, straightforward real estate products with high potential for value appreciation and clear-cut ownership are signaling a return.
Duong Duc Hien, Head of Residential Sales, North and Central Vietnam at Savills Hanoi said: “Customers are looking forward to better quality and transparent products in Da Nang in 2019. Investors also expect more urbanizing developments in the city rather than just hospitality products.”
Meanwhile in HCMC, there is great potential for high-end residential segment. Demand for luxury penthouses or million-dollar villas has risen sharply.
Along with high expectations in terms of location, comfortable living spaces, exclusive designs, environment, security and privacy, developer’s prestige, luxury furniture, a high-end residential product must match its owner’s taste. However, there is a shortage in supply of this segment.
According to Nguyen Khanh Duy, Head of Residential Sales at Savills HCMC, the average price of this segment is lower compared to those in other markets like Hong Kong, Singapore, Taipei, Tokyo and Bangkok.
In recent years, the number of foreign and local investors interested in the city’s residential housing market has soared tremendously thanks to the growing middle class and economy, the rise in reputable developers entering the market and loosened housing regulations opening more rooms for foreigner home ownership.
Savills also noted a considerable decline in new products launched in 2018, compared to the previous year. The fall is easing some concerns over an oversupply on the property market. Additionally, with the shortage of available land and new construction in downtown area and HCMC government’s decision to ban any new high-rise residential development in District 1 until 2020, price of newly built homes in downtown reach a new record of all times.
Savills said foreign investors are still confident in Vietnam as a potential alternative investment destination based on its attractive entry price, potential for capital appreciation and high rental yields.
