The following is excerpted from a JLL Research report on Vietnam Property Market Brief 2020. Please download the full report here.
Supply is pushed up by Manhattan phase of Vinhomes Grand Park
The supply remained limited with the number of units launched this quarter only half of the quarterly average during 2017-18 period; yet it has shown some signs of improvement when recording a 37% increase from 1Q20. Eastern areas of HCMC, where some key infrastructure projects going on, was again a bright spot in 2Q20 with Vinhomes Grand Park, Manhattan phase contributing nearly 65% of units launched, bringing the total to 609 units. Without this project, the supply in 2Q20 was just about the same as the quarterly average seen last year.
Healthy demand continues in the quarter
In line with supply, the total take-up increased by more than 50% from 1Q20, reaching 569 units this quarter and 65% of which came from Manhattan phase of Vinhomes Grand Park. In terms of sales rate, it remained healthy with about 70% of units available on the market taken up. As landed properties tended to locate far from the city centre where there were large land bank available for spacious and green living environment, they mainly attracted buyers for owner occupation. However, some large-scale projects also saw a number of long-term investors who looked to open their own shops, business or simply to keep the assets for capital gain as there was always a strong desire to own properties and land in the perception of Vietnamese people. Most of them had deep pockets and seem to be less affected by the slowing economy.
Prices continue to move higher
Primary prices set another new record high in 2Q20, reaching USD 5,277 per sqm land, up 35.9% yo-y and 5.2% q-o-q. This was mainly due to the entrance of new projects with higher-than-average price. demand, many developers were seen to keep the prices unchanged over the quarter, or some gave out discounts in the promotion package format after slightly raising the prices. This led to the prices almost stable q-o-q on the project basis.
Outlook
About 1,500 -2,000 units are expected to come online in 2H20, bringing the total units launched in the year up to 2,500-3,000 units, at least 50% more than that was seen in 2019. This is mainly contributed by the large-scale project, Vinhomes Grand Park, which will have another phase to be launched in 3Q20. However, this supply is still lower than the annual average during 2016-18 period as the legal issues still linger on.
Source: JLL Vietnam
