Residential market soars in 2015

The year 2015 showed a remarkable recovery in the residential market with strong launches, positive sales volume, and improved prices, particularly for mid- to high-end properties in both Hanoi and Ho Chi Minh City.

A number of factors helped the residential market across Vietnam see a remarkable recovery in 2015
-Photo: Le Toan

According to Lim Hua-Tiong, general manager of CapitaLand Vietnam’s North Office, despite a huge number of new units launched to the market in 2015, CapitaLand Vietnam sold more than 1,300 units from projects in both Hanoi and Ho Chi Minh City.

“This number is a solid result, and we are happy with it,” Hua-Tiong told VIR.

In mid-December of last year, CapitaLand announced that 100 units of its latest project, Seasons Avenue in Hanoi, were sold in only one day.

“The Vietnam real estate market has bounced back due to a stable economy, good control of inflation, favourable laws, including the allowance for foreigners to purchase properties in Vietnam. Our sales result could not be achieved without the CapitaLand team’s perseverance and effort in the past year, and we will continue to strive for future success moving forward,” Hua-Tiong said.

The owner of City Garden, another residential project located in Ho Chi Minh City, announced that the project reported more than 200 transactions for its Promenade, the second phase of the project. This figure is equivalent to 75 per cent of the total apartments for sale.

William Towne Baker, general director of City Garden, was also happy with recently-revised laws that encourage foreigners and Viet Kieu to buy properties in Vietnam.

According to Baker, a large number of buyers are foreigners taking advantage of Vietnam’s reformed regulations on foreigners’ property ownership.

Baker also noted that people saw a real advantage to investing in a growth area, particularly one that was the focus of so much infrastructure development.

Stephen Wyatt, country head of Jones Lang LaSalle Vietnam, commented that 2015 had some turning points in the real estate market.

“We have had a number of years of very soft market conditions. This year saw a lot of changes and more activity, and we expect that to continue in 2016. I think a number of factors need to be considered, especially in the banking sector,” he told VIR.

Wyatt added that the market really depended on how banks perform and continue to lend going forward. But credit has increased significantly, so developers have had more money to spend.

According to CBRE Vietnam, the residential sector shot up in 2015, with record figures, including the highest number of units on the market, and the highest number of units sold.

In Ho Chi Minh City, 2015 saw more than 41,900 units put on the market from 78 projects, mostly in the east and the south, an increase of 122 per cent year-on-year.

In Hanoi, more than 28,300 units were up for sale in 2015, an increase of 70 per cent compared to 2014, mostly in Hai Ba Trung and Hoang Mai districts, and the west of Hanoi.

According to CBRE’s figures, this year saw the highest ever number of units put on the market in a single year. This record is due to the introduction of the largest-ever project in Ho Chi Minh City, Vinhomes Central Park in Binh Thanh district, with over 7,500 units released for sale to date, and the second largest, Masteri Thao Dien in District 2, with over 3,700 units.

“The positive market momentum has boosted confidence for developers, with some even reformulating long-delayed projects and relaunching them back into the market with more capital, mixed-use integration, new unit layouts and sizing, and better price positioning or rebranding,” said Marc Townsend, managing director of CBRE Vietnam.

Overall, market sentiment remained encouragingly positive throughout the year. 2015 ended with a record high in sales volume for a single year: an estimated 36,160 units sold in Ho Chi Minh City, up by 98 per cent year-on-year, and more than 21,100 units sold in Hanoi, up by 40 per cent compared to the market peak in 2009.

In 2016, more than 45,000 new units from 90 projects in Ho Chi Minh City and more than 20,000 new units in Hanoi are expected to be put on the market.

By Bich Ngoc