In particular, transaction volumes in all segments, from affordable, mid-range to high-end housing, have declined. The whole market’s absorption rate also decreased 8 percent compared to last quarter.
The HCMC property market had slowed down in the last quarter of 2018, with only 11,000 units sold, equivalent to a 27 percent decline over the same period last year.
The downwards trend in consumption seen in HCMC has followed a decline in supply, Savills noted. Total supply, which includes unsold units and newly built units in the last quarter of 2018, dropped 44 percent year-on-year.
Real estate transaction volumes in Ho Chi Minh City (HCMC) in the first quarter of 2019 dropped 49 percent year-on-year.
This number fell by a further 34 percent in Q1 2019 to just over 12,000 apartments, representing a 57 percent drop compared to Q1-2018.
HCMC saw its one of its worst periods in the second quarter of 2018. Data from CBRE Vietnam said only 7,000 plus units were consumed, mainly due to negative sentiments after a fire at Carina Plaza apartment complex that killed 13 people and injured 28 in March.
After the fire, the HCMC market in general had consistently underperformed based on year-on-year comparisons, CBRE pointed out. In Q3-2018, new supply was just 6,711 units, down 14 percent compared to the same period last year.
Inspite of witnessing a soaring demand in the last quarter, consumption was still 16 percent lower than the same period in 2017.
According to CBRE, average prices of newly built apartments in the first 3 months of the year increased 3.1 percent quarter-on-quarter, and rose by 14.9 percent year-on-year.
Chairman of the Ho Chi Minh Real Estate Association (HoREA) Le Hoang Chau told local media that one of the problems facing the city market stems from legal difficulties in selling projects. In fact, there is a lot of supply, but many fail to meet regulatory standards required to begin selling.
Mr Chau said various realty projects get stuck at many levels from applying for approval from local authorities to getting permission to begin construction and to getting permission to begin selling. These are major obstacles for investors, who just want to sell their inventory as soon as possible to recover capital.
