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.
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
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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