Hanoi’s landed property price will be driven upwards
As opposed to the condominium market, market momentum in landed property sector remained positive as the transaction volume reached more than 1,000 units, according to Colliers International. Especially for some newly launched projects, the absorption rates reached 90% within a short period of time. The primary asking price was stable while the secondary price recorded a slight appreciation, averaging USD4,500/sqm.
In second quarter, the ready-built townhouses and villas market in Hanoi welcomed 1,350 units from 8 projects (in which 6 projects were opened for sale before). Townhouses have dominated the landed properties in the last two years and their products in suburban districts typically target middle-income buyers. The improvement of urban traffic continues to promote the expansion of the supply to new locations. There has been a big change in the allocation of new supply, the Eastern region was estimated about 80% of the total new launched units in the first 6 months. While the total supply still comes mainly from the Western region.
Hanoi's townhouses.
The absorption rate in second quarter of 2019 is positive with more than 3,000 units was sold, increased 16% y-o-y. In Vietnam, landed property is one of the traditional investment channels given its long-term capital gain. Although condominiums have gained its popularity in recent years, landed property is still the preferred choice of accommodation. There are two major groups of buyers in this market segment. While investors prefer products from new launches to take advantage of good initial pricing, end-user customers would seek projects with reputable developers, good construction progress and supporting facilities.
In upcoming quarters, the market is expected to see more new supply, most come from the following phase of projects that have been sold before. Absorption rates will be positive on the back of improved buyers’ sentiment and effective marketing campaigns from new launches. The primary sale price will follow upward trend in the midst of solid demand from both end-users and investors.
A positive outlook is expected for Ho Chi Minh City’s landed property
Prices of ready-built landed properties have increased drastically in the past few years due to limited land bank. Shophouses are seen as a lucrative alternative investment channel for investors with large cash reserves, and prices of landed properties have increased by approximately 10% from the start of 2019.
As the average land price in Ho Chi Minh City (HCMC) has skyrocketed, developers are moving outwards to fringe areas of the city. The announcement of Nam Long Group’s acquisition of Keppel Land’s 192-ha Waterfront City development in Dong Nai, and Vingroup’s development of Vinhomes Grand Park, signaled the start of this movement.
Townhouses and villas in HCMC.
While end-users are the main target customers for the condominium projects, investors are more potential buyers of villa and townhouse products. In addition, due to the fact that the price hike of apartments has led to less profit making opportunity, villa and townhouse segment has become the best alternative investment channel for affluent class. High absorption rates in many recent projects have indicated healthy demand for this market in coming years.
The landed property sector in HCMC is expected to have a positive outlook with conditions enhanced by a combination of increased investor sentiment, developments in international trade and significant government infrastructure investment. It is also forecasted that price of townhouse will grow with faster speed than that of villa due to limited pipeline and possibility of making high profit.
