Total residential transaction volume in Vietnam’s biggest metropolis of Ho Chi Minh City was about 10,000 units, falling 30% on quarter and marking the lowest over the last six consecutive quarters, Savills said in the latest report.
Part of Ho Chi Minh City. Photo: Nhip Song Kinh Te
The absorption rate was 53%, down 3 percentage points on quarter.
Transaction of Grade A increased 58% on quarter thanks to sales in a new upscale project in Thu Thiem peninsula while Grade C accounted for 54% of total transaction volume.
Until 2020, over 124,000 units are expected to be launched, of which 55% of the future supply will come from Districts 2 and 9. Savills said that infrastructure improvement and the planned Innovation Area will strengthen residential demand.
Meanwhile, the office index was the highest for the last five years at 99, up 4 points on quarter. The improvements were driven by quarterly increases in rent and overall occupancy.
In terms of occupancy, the non-CBD (central business district) had higher occupancy rate than the CBD for the first time in five quarters, at 98%, up 2 percentage points on quarter.
In a latest move, the city’s authorities have made efforts to tackle long-lasting problems that have slowed down the real estate market. According to the Ho Chi Minh City Real Estate Association (HoREA), main reasons are inclusive of shortcomings in project approval, site clearance, project transfer, the Build-Transfer form, credit-related issues, and administrative procedures.