In the second half of this year, about 24,200 units from four existing, and 18 future projects will enter Hanoi's market. (Photo: zing news) Hanoi (VNS/VNA) - The apartment supply in Hanoi is expected to surge in the secondhalf of this year to meet higher demand in this segment, according to Savills Vietnam.
In thesecond half of this year, about 24,200 units from four existing, and 18 futureprojects, will enter the market, with Grade B continuing to lead segmentshare.
Do Thu Hang,Director, Advisory Services, Savills Hanoi, made the statement at Savills Vietnam'spress conference on a report on Hanoi's property market in the first half ofthis year, held on July 21.
Of the 22projects announced, 68 percent are under construction with 32 percent at thefoundation level. Leading future suppliers are Tu Liem district with 45 percentof stock, Gia Lam with 32 percent and Hoang Mai with 9 percent.
"GradeB remains the driver, however, all classes have suffered short term demandpressure. Large supply handed over in 2020 may see rental yields soften.With abundant infrastructure being completed, long term returns remainsound," said Hang.
However, urbanisation,strong population growth and shrinking households all contribute to residentialproperty demand, she said.
In 2020, Vietnam'surbanisation was 37 percent lower than Southeast Asia (50 percent) and Asianpeers (51 percent). Lagging urbanisation implies strong future developmentpotential.
A 96-millionpopulation in 2019 is expected to surge to 120 million by 2050 with a nationalurbanisation rate at 57 percent. The emerging middle class, currentlyaccounting for 13 percent, is expected to reach 26 percent of the population by2026, according to Savills.
Totalhouseholds increased 1.8 percent per annum from 2009-19. Of which, eachhousehold had an average of 3.5 persons, 0.3 persons fewer than in 2009.
In line withHanoi's urban expansion, supply is shifting from urban areas to ruraldistricts. In 2016, Hoai Duc and Thanh Tri districts provided 10 percent ofsupply. In the second quarter of this year, Gia Lam, Dong Anh, Hoai Duc andThanh Tri districts together provided a 27 percent share. Strongly performingEastern districts in the first half of this year made suburban district salesaccount for 22 percent.
Thosedistricts have future large satellite projects, including Xuan Mai Smart City(3,072 ha), Vinhomes Co Loa (299 ha), BRG Smart City (272 ha) and VinhomesWonder Park (133 ha). These developments were expected to deliver sustainablesolutions to population pressure, traffic congestion and infrastructureshortages.
This Savillsquarterly report also said the lockdown lasting just 22 days helped easedownward pressure. In the second quarter of this year, five new and the nextphases of seven existing projects provided about 6,200 apartments, up 28 percentquarter on quarter (QoQ) but down 6 percent YoY.
Primarysupply increased 5 percent QoQ but decreased by 6 percent YoY to 29,200 units.Grade B accounting for 74 percent remained the largest supplier.
Increaseddeveloper and buyer confidence accelerated new project launches andsecond-quarter performance. There were about 5,400 sales, up 11 percent QoQ butdown 43 percent YoY.
In the firstsix months of this year, the market had about 10,300 sales, down 47 percent YoYwith a 30 percent absorption, decreasing 17 percentage points (ppts) YoY.
Pandemiceffects made sales difficult in the first six months but average primary pricesremained stable QoQ and moved up 7 percent YoY to 1,460 USD per sq.m.
Meanwhile,Savills saw HCM City market's primary stock in the first half of this year down52 percent YoY to over 9,100 apartments, to a five-year low.
The long Tetholiday followed by the pandemic has severely affected developer planning.Supply in the second quarter of this year from four new entries and 10 nextphases totaling 2,100 units, plunged 55 percent QoQ and 74 percent YoY.
Sevenplanned launches have been postponed to the second half of this year. SunshineHorizon launched limited stock pre-lockdown with an upgraded online approach.With foreign customers' lower demand and more cautious investors, Grade A and Blaunches each provided less than 100 units.
"Thepandemic delayed new launches and slowed foreign investors. However, localdemand remains steady, particularly for affordable units," said Nguyen KhanhDuy, Savills Residential Sales Director.
Sales in thefirst half of this year in HCM City fell 55 percent YoY, to just over 6,800units, the lowest in five years. Grade C performed best with up to 84 percentabsorption while contributing 64 percent of all sales in the first half of thisyear.
The threenew Grade C projects each achieved over 80 percent absorption. Overall demandwas positive with 75 percent absorption slightly easing 4 ppts YoY./.
VNA
