This morning, April 25, at the announcement ceremony of a luxury apartment project, Mr. Nguyen Trong Ninh, Director of the Housing and Real Estate Market Management Department (Ministry of Construction), said that the demand for luxury housing from residents, foreigners, and overseas Vietnamese is still very high.
Typically in 2018, the Hanoi market recorded about 19,350 successful transactions, an increase of about 1.7 times compared to the same period in 2017. Meanwhile, this figure in Ho Chi Minh City was 18,700 transactions, an increase of about 1.8 times, notably with the majority of successful transactions belonging to the luxury real estate segment.
Since the beginning of this year, according to transaction reports on the real estate market in the Southern region published by some market research companies, property investors still “favor” the luxury housing segment with a series of projects introduced to the market.
CBRE commented that in terms of the sales structure of apartments, the luxury apartment segment currently accounts for the highest proportion (41%), followed by the mid-end segment (39%). CBRE estimates that more than 18,200 high-end and luxury apartments will be launched in 2019, and about 41,000 units in the following years. Meanwhile, the supply of affordable housing (600 million – 1.2 billion VND) is scarce compared to actual demand.
Most market research consulting firms record that the supply of luxury apartments in Saigon is rapidly increasing. For example, according to Savills’ report, starting from Q4/2015, demand for luxury products has risen sharply in developed areas; the number of transactions of luxury apartments valued at over USD 300,000 accounted for about 28% of the total transactions.
Although the reports vary somewhat in data, the common point is that they all record the increasing supply of luxury apartments, accounting for a large proportion of the overall market. It is forecasted that in the coming months, this market will continue to receive more new high-end and luxury projects.
Our survey also shows that over the past month, a series of projects have officially been launched into the market, such as Dat Xanh launching the Opal Riverside Project in Thu Duc District; Hung Loc Phat recently introduced the high-end project The Golden Star in District 7; An Gia Investment is expected to officially announce the River City project with more than 8,000 luxury apartments at the end of April; in early May, Hung Thinh Land also announced it would launch the Saigon Mia apartment project in Binh Chanh District…
Mr. Nguyen Trong Ninh remarked that the real estate market is currently entering a strong development phase after a long freeze. The number of apartments launched is higher with projects containing a relatively large number of units.
According to Dr. Nguyen Tri Hieu, real estate businesses are pushing the luxury apartment product line mainly because they expect progress in Vietnam’s TPP integration and trade agreements. In addition, investors also expect many foreigners to buy houses in Vietnam under the open regulations of the Housing Law. However, Dr. Hieu also noted that only when Vietnam further expands regulations allowing foreigners to borrow money from banks to buy houses, and mortgage houses formed in the future… will the number of foreigners buying houses increase significantly.
