Ho Chi Minh City Apartments Sold Increased During the First 6 Months of 2021

Although the real estate market is “tired” because of the prolonged Covid-19 pandemic, recently, the real estate market has been quite surprised to receive information about a number of projects, especially apartment projects “sold out” after a few hours of launching. Some projects that are about to be marketed also have very good forecasts (Such as Masteri Centre Point).

According to CBRE’s statistics, in the first 6 months of 2021, Ho Chi Minh City supply of apartments reached 5,600 units, down 9% compared to the same period in 2020. The supply of apartments in Hanoi reached about 8,000 units.

Compared to the offered supply, the number of sold apartments was quite positive. The absorption rate in HCMC was almost 100%. Buyers even bought previously offered apartments, making the supply of sold apartments in Ho Chi Minh City reached 8,000 units during the first semester of 2021, an increase of about 9% over the same period last year. In Hanoi, the data is quite similar to HCMC market. The number of sold apartments also increased by over 12%.

Thus, according to CBRE, in the first 6 months of this year, the supply of apartments for sale decreased, but the number of apartments sold still increased compared to 2020. However, we need to note that this is the data of the first 6 months of 2021 and this 4th Covid-19 outbreak took place in early May. If we count the 3rd quarter of 2021, the data will certainly be severely reduced. Ho Chi Minh City and Hanoi began to implement strict distancing regulations. Most of the activities of mass gatherings and opening sales events have been delayed. CBRE does not have exact figures for the entire first 9 months of the year, but we can see that there is almost no offering activity in the 2 major cities. Surely the figures on supply and apartments for sale will also drop extremely low.

The Covid-19 epidemic caused a large decrease in the supply of apartments, affecting the number of apartments sold. But the selling price apartments in Hanoi and HCMC both increased, especially in Ho Chi Minh City, the average selling price of apartments in the city in the first 6 months of the year was about 2,260 USD/m2 and all segments saw price increases compared to the previous year.

Compared with the previous year, the average price increase in Ho Chi Minh City about 15-16%, which is quite high. In Hanoi, the price increase is also around 3-9%.

As for the recent developments of part-time apartment projects that have an absorption rate of up to 95-100%, CBRE said that the supply decreased and The number of successful sold apartments will certainly decrease as well. Simply because the supply is limited and buyers do not have much choice with these products, but the demand in the market is still there. 

Realizing that the demand is still but the supply is scarce, any investor who has the capacity to offer products at this stage and use online sales channels will surely attract a lot of buyer’s interest. Good quality products with reasonable prices will attract the attention of buyers.

We see that there are products with a very high absorption rate, the average in the market in the first 6 months is 80%. There are products that are almost sold out. This is also a rather special signal in this period.

CBRE also gave two scenarios for the real estate market, forecasting the scenario depends a lot on the opening scenario of Ho Chi Minh City.

Scenario 1: If Ho Chi Minh City opens gradually in September and goes back to work in October and activities are reopened gradually, the total number of apartments opened for sale in HCMC is forecasted to increase in the next few months. In 2021, it will be about 13,000 units and in Hanoi it will be about 17,000 units. Corresponding to the number of apartments for sale, the consumption is also at about 12,000 units for Ho Chi Minh City and 17,000 units for Hanoi. Of course, these numbers are much lower than CBRE’s previous forecast and much lower than the figures of previous years, including 2020. During peak periods, there are years where it when up to 35,000 apartments sold.

The second scenario: We have not opened gradually in October but have to wait until the end of 2021. In this scenario, the number of apartments offered for sale in Ho Chi Minh City will only be 8,000 units and in Hanoi 14,000 units.

According to CBRE, the social distance as well as the curfew will also greatly affect the sales structure. Customers always want to directly attend sales events, visit model apartments and talk to investors related to sales. Of course, prolonging the social distance like the current one will make the sale and purchase process very slow.

In these two scenarios, CBRE is inclined to the second scenario. Because if it is opened gradually in October 2021, mass gatherings are still not allowed to be implemented. It is possible that outdoor events or allowed but should not exceed 30 people. With such a small concentration of people, investors with large-scale projects that want to sell must do it in phases with small and medium quantities.

Although CBRE is quite optimistic about people’s demand, about the absorption rate of some individual projects, buyers themselves must be very cautious. If we look at 3 months ago, we see that they can still be very optimistic and still have a lot of demand. But in the past 3 months, a lot of people have to work from home, or not even continuing to work as before. They will have to think very carefully, whether buying for living or buying for investment. 

For more information about the real estate market in Vietnam please contact me directly via email at: daisy@mycasagroup.com. Your trusted property agent in Ho Chi Minh City.

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