The condominium supply in HCM City in the last quarter of 2022. (Photo Courtesy CBRE Vietnam) This volume, experts reported, is lower than that of Hanoi and that of anyquarter in HCM City in previous years.
A report from CBRE said that within this supply, the high-end segment willcontinue to dominate with 75%.
The luxury segment and mid-tier segment, the company reported, shared the sameproportion of 12%.
Most future supply will come from subsequent phases of already launchedprojects, and only six out of 20 expected projects are first-time sales.
According to CBRE, the eastern area is the main development direction of thecity, with over 48% of total supply, while the western part of the city isforecasted to be the new highlight, with more than 2,000 units to be launched,most of them in Binh Tan district. Hoc Mon ward is also expected to welcome itsfirst commercial condominium project with a supply of nearly 800 units.
"The first half of 2022 witnessed the recovery of the residential market,and this trend was expected to continue. However, turbulence in the latter halfamidst the recovery has affected the recovery speed, as well as marketsentiment. CBRE forecasts that difficulties will continue in 2023 with limitedsupply and low liquidity due to challenging credit accessibility for homebuyers. There will be adjustments in the supply with fewer luxury products andthe focus will be on high-end and upper mid-end segments. The average primaryprice will stabilise in 2023-2024,” Duong Thuy Dung, executive director of CBREVietnam, said.
“When the market can be back to normal will depend on the speed of themacro-economic policy approval, including credit policy, the revised land lawand the legal issues resolving to break the deadlock for new supply," shesaid.
In the last quarter of 2022, only 1,312 new condominium units were launched inHCM City, the lowest new supply within a quarter over the last ten years exceptfor the two pandemic years, bringing total launched units in 2022 to 18,440,equal to the number in 2020 but only 70% of the pre-COVID-19 level in 2019.
The eastern part of the city continued to lead the market with three newlylaunched projects and the next phase of one existing project, providing over1,000 units, making up nearly 81% of the new supply.
CBRE said that besides the licensing issue in recent years, many developershave intentionally delayed their sales plans due to concern that economicrecession will affect demand.
The high-end segment remained the leading segment, with over 16,850 units,accounting for 90% of total supply within the year. Remarkably, 93% of totalsupply in 2022 was launched in the first three quarters and 60% of it came fromdifferent phases of a Vinhomes township in District 9.
All newly launched projects in 2022 were developed by major renowned developerswith landbank from previous periods.
Q4 2022 recorded 1,155 sold units, down 85% quarter on quarter. The number ofunits sold is also less than the newly launched units within a quarter for thefirst time since the pandemic.
The average primary price in Q4 2022 was relatively stable compared to theprevious quarter. The luxury segment is the only segment that experienced pricegrowth at 1.4% quarter on quarter, 7.8% year on year, while other segments'primary prices stayed at the same level compared to the previous quarter.
However, sales policy showed a major revision in the last quarter of the yearwhen numerous developers offered more vigorous discount rates than usual. Thediscounts ranged from 20% to 45%, depending on payment schedules and otherpromotional schemes. The high discount rates only came from developers undersubstantial financial pressure, and the projects' legal status is stillunclear.
CBRE said average secondary prices started to decrease in Q4, but mainly inprojects with many units and a high level of speculation. The price reductioncan be up to 20%.
“This price decrease reflects the investors' expected profit adjustment but notthe "cut loss" of the whole market yet. Investors that did not usefinancial leverage or have no cash flow pressure are still waiting for a bettertime to sell their assets,” CBRE suggested./.
VNA
