House costs proceed to extend, Ho Chi Minh Metropolis is larger than Hanoi

Costs have elevated over the previous 2 years

Many market evaluation experiences have recorded that condo costs in two large cities, Hanoi and Ho Chi Minh Metropolis, have continued to extend in recent times, regardless of the detrimental results of the pandemic.

In accordance with CBRE, within the second quarter, the typical promoting worth of major residences in Hanoi was at $1,472 per sq. meter, up 7% over the identical interval final yr. Newly accomplished mid-end initiatives, positioned in handy areas resembling Hai Ba Trung or Bac Tu Liem districts, recorded the best worth improve in a yr. Some initiatives recorded a rise of 8-9%/yr. Though the value improve is larger than in earlier years, it’s nonetheless decrease than the edge of the HCMC market, the place there are initiatives that report worth will increase of as much as 10-15%/yr.

Recorded in Ho Chi Minh Metropolis, the typical promoting worth reached 2,260 USD/m2 (excluding VAT), up 16.5% over the identical interval final yr. The posh and mid-end segments recorded a excessive worth improve of 9.2% and eight.3%, respectively, over the identical interval final yr.

CBRE defined that in HCMC, the typical worth elevated considerably on account of lack of provide within the mid-end phase; The posh phase welcomes the branded residence product line. In Hanoi, mid-end merchandise nonetheless play a dominant function, accounting for 79% of the brand new provide.

From CBRE’s information, calculations present that, prior to now 2 years (Q2/2019 – Q2/2021), condo costs in Hanoi elevated by 10% and Ho Chi Minh Metropolis elevated by 17%.

Apartment prices continue to increase, Ho Chi Minh City is higher than Hanoi - Photo 1.

Knowledge supply: CBRE Vietnam. Unit: USD/m2

The report of the Ministry of Development within the second quarter additionally recorded that condo transaction costs, particularly in Hanoi and Ho Chi Minh Metropolis, nonetheless elevated by about 5-7% in comparison with the earlier quarter. Together with that, the variety of transactions elevated by about 5% in the identical interval final yr.

In accordance with the newest information in July of, the condo worth index in Hanoi and Ho Chi Minh Metropolis continued the development of accelerating 2% over the earlier month. In comparison with the identical interval in 2020, residences in Hanoi and Ho Chi Minh Metropolis elevated by 7% and 10%, respectively.

The information of this unit additionally exhibits that the typical worth of residences in Ho Chi Minh Metropolis is way larger than in Hanoi. In Ho Chi Minh Metropolis, the typical promoting worth of an condo is about 53 million VND/m2 whereas in Hanoi it’s 34 million VND/m2.

Costs will proceed to rise

CBRE expects the first promoting worth in Hanoi within the subsequent 2 years is anticipated to extend within the vary of 4-6%, larger than the rise of three% in 2020 due to the step by step bettering infrastructure system and new provide. too considerable as in comparison with the interval earlier than the Covid-19 epidemic. In Ho Chi Minh Metropolis, the first worth is anticipated to proceed to extend in comparison with 2020 however the improve shall be extra steady in order that the market can eat all of the remaining merchandise. The first asking worth in 2021 in all segments may have a worth improve of between 1% and 4% in comparison with the earlier yr. Significantly, the value of luxurious residences is anticipated to extend by 6% this yr and subsequent yr due to new merchandise resembling luxurious branded residences in District 1.

Mr. Dinh Minh Tuan, Director of within the South area mentioned that in line with large information of, within the second quarter and the final two months, the curiosity in addition to the condo worth on the market continued to proceed. tended to extend each in Hanoi and HCMC. This exhibits that regardless of the difficult epidemic, the demand for housing within the inhabitants continues to be massive and so they nonetheless proceed to look, deposit and make transactions after the social distancing is over.

Apartment prices continue to increase, Ho Chi Minh City is higher than Hanoi - Photo 2.

Costs of residences on the market in Hanoi (left chart) and Ho Chi Minh Metropolis (proper chart). The supply:

Subsequently, within the coming time, residences will proceed to be scarce in major initiatives and primarily deal with the high-end phase. The secondary market shall be affected in a short while as rental costs are affected, transactions lower. It’s forecasted that when the epidemic is underneath management, actual property costs will proceed to development up.

Mr. Tuan identified Three major causes for the rise in condo costs. First, the large guys lead the value recreation. When the availability out of the market is scarce, land funds in good and prime areas are within the arms of some massive buyers, who start to set costs a lot larger than the pre-established worth stage. this. For instance, within the central space of ​​Ho Chi Minh Metropolis, 2 years in the past, the best condo worth was 200 million VND/m2, this yr it has reached 450 – 500 million VND/m2; District 9 additionally set a brand new worth of 55-60 million VND/m2 in comparison with the previous worth 25-30 million VND/m2.

Second, the price of land use charges and challenge growth prices improve quickly yearly. These are the important thing prices that make condo costs at all times set up a brand new worth stage.

Lastly, the price of development supplies for initiatives resembling iron, metal, cement, sand is escalating sharply and is forecasted to haven’t any finish – contributing to the rise in promoting costs, particularly for initiatives with excessive costs. development time and progress over 2-Three years.

A consultant of mentioned that actual property is normally nonetheless a secure channel and when held, the revenue charge is larger than that of banks and will increase in worth yearly. Traditionally, actual property costs in most segments have elevated (making a steady psychology), so at this stage, buyers ought to solely prioritize steady product traces, secure money movement secure (condo has an excellent worth, has a secure cost plan, to not point out a low mortgage proportion).

Kong Chiem