In 2022, the residential market recovers slightly after a pause in 2021 due to Covid-19. The apartment sector recorded a total of 17,028 units offered for sale, an increase of 87% compared to 2021.
In the quarter, the market only recorded nearly 1,100 new apartments for sale, down 74% compared to the previous quarter, and amounts to only 6.5% of the total supply in 2022. In Q4 2022, new sales reached 983 units, a decrease of 76% compared to the previous quarter.
In Q4 2022, the Government's review of bond issuance and tight credit control policy has partly created a cautious sentiment among buyers and investors and put great pressure on the market. As a result, both buyers and investors will adopt a “wait and see” approach as new 2023 policies roll out, before making a decision.
The average primary selling price in Q4 2022 increased by 21% compared to the previous quarter, reaching about US$3,400/sqm. This increase is mainly due to new sales from super luxury, luxury and high-end projects such as The Opusk Residence Thu Thiem (Metropole Thu Thiem phase 4), De La Sol and Zeit River Thu Thiem, etc. Health benefits are coming into focus in the design of residential projects with green spaces, open areas, and modern technology to help raise living standards.
Classifications:
• Ultra Luxury: >US$ 10,000 /sq.m
• Luxury: US$4,500 - 10,000 /sq.m
• High-end: US$ 3,000 - 4,500 /sq.m
• Mid-end: US$1,500 - 3,000/ sq.m
• Affordable: < US$ 1,500/ sq.m
Source: Cushman & Wakefield; All prices are exclusive of VAT based on NSA; Exchange rate VND/USD = 23,820
Regarding payment policies, with the credit tightening situation, many payment policies targeting customers with cash are introduced, mainly prioritizing fast payment with high discounts and attractive incentives.
Some prominent trends can be mentioned is social housing, with about 2.5 million sqm of social housing floor to be developed for low-income people by 2025. Major developers to participate in developing social housing: Vinhomes, Hung Thinh.
The East and West zones continue to be the major contributors to new supply thanks to current infrastructure improvements and upcoming projects. Developers are offering more flexible payment policies in times of credit control along with incentive and discount programs to maintain sales.
Demand is still strong for Mid-end apartments, buyers prefer wellness-oriented products and projects with flexible payment schedules. Long-term investing is the appropriate strategy at this stage.
Fast payment policies and high discounts are gradually being widely applied:
- Buyers can receive a discount of 3% - 16% if they choose fast payment option
- Grace period of principal and interest-free from 12 to 36 months when borrowing from a bank.
- Interior gift package, commitment to sublease or discount directly to the value of the apartment
Regarding the townhouse market, in 2022, new supply will reach 1,200 units, up 12% year-on-year due to the market's recovery compared to 2021 when it was quiet due to Covid. Meanwhile, the number of units sold decreased by 3% due to the slowing market sentiment and the hesitation of buyers in the context of uncertainty. Primary selling price decreased slightly by 0.2% QoQ due to some projects offering discount policies, but prices still doubled compared to the same period last year because the supply mainly came from the high-end segment in different locations. prime location.
In 2023, due to limited land for development, and difficulties in raising capital, the new supply is expected to be lower than 900 units, down 27% compared to 2022.
Compared to previous projects, most new projects have more facilities with complete external and internal infrastructure, with a tendency to take inspiration from historical - cultural - artistic design, contributing project value enhancement. It can be seen that the projects are built with the expectation that the house is no longer just a place to live, but also a weekend getaway between the river scenery and the fresh natural environment.
In general, from the investor side, we see that the projects focus on completing utilities, towards building community, with new supply continuing to move to non-CBD areas. On the customer side, the market is moving towards real demand instead of buying investment as before. Projects with clear legal status and flexible payment schedule in the context of financial difficulties will attract customers.
