Most Luxury Apartments in Hanoi, Vietnam Sold to Investors

December 17, 2018 Vietnam

Investors dominate  Luxury Apartment Sales in Vietnam (Hanoi and Ho Chi Minh City)

Luxury apartments in Vietnam have gained popularity with investors. For this year, almost 70% of the grade A residences in Hanoi was bought by investors, said Savills Vietnam. Likewise, Ho Chi Minh City is seeing the same trend.

Most Luxury Apartments in Hanoi, Vietnam Sold to Investors | Yazhou Property
Photo by Minh Minh on Unsplash.

On the other hand, the grade B (mid-end) residence sales in Hanoi comprises 40% investor sales, 55% occupiers, and the 5% to speculators. Meanwhile, Ho Chi Minh City accounted for almost the same statistics, having 45% investor sales, 50% occupiers, and 5% for speculators.

In recent years, the Vietnam property market has been experiencing a boom in both grade A and grade B residences. In contrast to this, grade C residences gained popularity within occupiers who make up 85% to 90% of transactions.

The State and Forecast of the Vietnam Property Market 

Despite the great take-up on both high-end and mid-end Vietnam properties, the apartment supply in the Vietnam property market has seen a decrease between January and October this year, said Ho Chi Minh City Real Estate Association (HoREA).

In total, there was a decrease of 39.2% in Ho Chi Minh’s housing supply. However, the biggest decrease in supply was the low-priced apartment segment, which was down 68%. The high-end apartments, on the other hand, fell 9.6% while the mid-range fell 37.5%.

HoREA further warned of the imbalance regarding Vietnam’s real estate supply, especially because luxury apartments took up a third of the whole real estate market while low-priced apartments took up only 19.3%. This shows a mismatch between supply and demand, which HoREA felt to be a risk in sustainable development and social welfare.

However, HoREA Chairman Le Hoang Chau said that Vietnam would not experience a property crisis in 2019. At the moment, Vietnam is not experiencing a rapid increase of economy, loose policies from government credit management, and a great difference in supply and demand.

Furthermore, in the trend of Vietnam apartments for sale, Savills predicts that low-end residences will take up most of Ho Chi Minh City’s real estate supply in 2020, reaching about 60% of the lot. Despite this, the mid-range segment will lead the Vietnam property market with a take up of almost half the supply. At this time, the high-end supply of luxury apartments will have a greater number in Hanoi at 15%, while Ho Chi Minh City has about 8%.

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