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Wednesday, June 12, 2024

Condominium supply in Q3 lowest in three years: CBRE

The Saigon Times

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HCMC – Due to the disadvantages of online transactions and the cautiousness of both investors and customers amid strict social distancing, the new condominium supply in the third quarter of this year fell to its lowest in three years with 1,600 units, or 40% of the figure in the previous quarter, according to CB Richard Ellis Vietnam (CBRE).

Last quarter, only two high-end projects were launched online, while others delayed their sales plan. However, the two projects achieved outstanding performance with a sold rate of 82%. Binh Tan District also recorded a project in the high-end segment.

The total supply in the January-September period was nearly 7,500 units, down 35% year-on-year. The mid-end segment led with 43%, followed by high-end with 31% and affordable with 23%.

Last quarter, the number of sold units also tumbled 68% to some 1,600 units because of limited new supplies.

However, all segments witnessed a positive price growth, with the luxury segment reporting the highest increase of 8%.

This quarter, more than 6,000 condominium units are expected to be launched, leading to the total supply this year reaching 13,000 units.

Senior director of CBRE Vietnam Duong Thuy Dung said the gradually controlled pandemic and increasing vaccination rate are fundamental driving forces to help the real estate sector recover, especially when business activities return to the new normal. Positive signs even during the pandemic highlighted the demand for housing and confirmed the attractiveness of residential properties.

With the strategy of developing satellite urban areas in HCMC, the real estate picture in the south looks prosperous. Binh Duong, Dong Nai and Long An provinces will have more products to meet diverse customer needs. In addition, infrastructure projects constructed through the pandemic and expected to be completed in 2022-2024 will bring positive momentum to the property market in HCMC and surrounding areas.

As for the office market, the number of transactions in the third quarter was 30% lower than the average of the previous two quarters and most transactions were of relocation (40%). The top three most active sectors were information technology, finance/banking and manufacturing, accounting for 80% of total leased areas.

According to Pham Ngoc Thien Thanh, associate director of Research & Consulting at CBRE Vietnam, the HCMC office market had shown signs of positive recovery. The pandemic had shifted the occupier’s demand, especially large and multinational companies. In the next three years, developers of new Grade A projects should invest in buildings’ features related to the environment, health and work safety for sustainability.

Meanwhile, the retail market did not welcome any new supply in the third quarter. However, the M&A activities of large corporations remained active.

Specifically, Masan acquired a 70% stake in Mobicast to expand in digitalization and Mobile World recorded a good performance from the Bach Hoa Xanh supermarket chain. In other provinces, the Go! Supermarket chain by the Central Group will be active in expansion in the next two years.

Over 200,000 square meters for retail is expected to be launched by 2024.

Thanh said the market might be sluggish in the last quarter as the pandemic fight is still going to be the city’s priority. Only when GDP recovers alongside an improvement in personal incomes, the retail market could enter a new cycle of growth.

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