Vietnam's real estate market has undergone nearly 30 years of development with many ups and downs, among which, 2021 is considered the most volatile and 'unforgettable' year. The outbreak of the COVID-19 pandemic has caused disruption to the real estate market, GDP growth was slower than previous expectations in 2021, reaching only 2.58%. However, rapid vaccination coverage programs have allowed many localities to reopen and less border restrictions. Import and export turnover of goods still had a fair growth outlook with value of 668.5 billion USD. FDI capital in 2021 also increases by 9.2% y-o-y to USD 31.15 billion, according to GSO number.
With the economy gradually getting back on track, the real estate market has also gathered momentum in the last three months, focusing on housing segment in the key cities such as Ho Chi Minh and Hanoi Cities. Sales in HCMC were recorded at high levels, with many apartment projects were sold out from the first launch of the project. C&W publishes the Q4 2021 report of HCMC apartment with the below segments:
- Grade A: Project has prime location, with selling price above US$3,000 per sqm
- Grade B: Project has convenient location, with selling price ranging from US$1,800 – 3,000 per sqm
- Grade C: Project has selling price below US$1,800 per sqm
Market Supply: Launching activities began dynamic again after a five-month lockdown. Overall, new launch was recorded at 2,600 units coming from nine projects, down 69% y-o-y but still improved by 54% q-o-q. Grade B continued to dominate with 90% of total new supply in Q4 2021, with many notable newly launched projects such as Vinhomes Grand Park_Beverly, Celesta Heights and Moonlight Centre Point. Grade A accounted for the remaining 10% with newly-launched projects like Thao Dien Green and Define. Meanwhile, Grade C recorded no new supply in this quarter.
Market Absorption: Total apartment units sold were recorded at nearly 3,000 units. Demand was healthy from both investors and owner-occupiers. Grade B remained the most attractive segment with 82% of total transactions, thanks to developer’s good product mix and selling strategy. Although Grade A only accounted for 11% of total take-up, some Grade-A projects in Thu Duc City recorded quick absorption as they were limited and would prove a sound investment channel in such a period of low-interest rate.
The buy-to-let market experienced heavy impacts from Covid-19. However, with the resumption plan of international flights in 2022, and increasing investment sentiment for apartment, the buy-to-let market is expected to fully recover in 2023.
Price Performance: The market saw average prices rise by 9% q-o-q and 15.3% y-o-y. Grade A achieve US$6,266 per sqm, a growth of about 36% q-o-q and 23% y-o-y, thanks to new launches at remarkably high price this quarter. Meanwhile, Grade B remained stable at US$2,474 per sqm. Grade
C recorded an increase of 7% q-o-q at US$1,785 per sqm. On yearly basis, both Grade B and C recorded high increase of 15% and 26% as many high-quality projects in the outskirt entered such as Vinhomes Beverly, The 9 Stellars and Picity High Park.
Attractive sales programs and policies continued to be offered to customers in this quarter. The online methods were still utilized to maintain their presence, but some developers have predicted the “new normal” after Covid-19, and invest heavily in sales gallery to enhance customer’s experience, which are particularly important to lead to purchase decision later.
Market Outlook 2022: With the “new normal” after Covid-19 already in place in HCMC, the construction progress resuming and launching activities becoming vivid again, the market prospective in 2022 is expected to be very bright with about 25,000 – 30,000 units launched into the market. Recently, 4 land plots in Thu Thiem were successfully auctioned. This will help open the auction of the remaining land lots in Thu Thiem and create more opportunities to invite more investors into this area, thereby improve HCMC’s landscape.