Real Estate Transactions in Vietnam fells deeply.

In the first half of 2021, transactions have rebounded, surpassing pre-pandemic levels in countries such as Singapore, US & China. 

However, with China’s second-largest real estate group, Evergande, on the verge of collapse, the country’s property market is likely to slow down in the next few months.

Singapore vs Saigon (Ho Chi Minh City) of Vietnam | Drone Aerial Footage -  YouTube

According to the latest report of Savills global Research team, in many countries around the world, the number of transactions and the price of residential real estate in recent months have recorded a significant increase. The number of real estate transactions in a few cities such as Miami (USA) and Singapore has returned, even exceeding the pre-epidemic level. However, not all housing markets have such a rapid recovery.

According to this experts, the pandemic has brought about significant changes to the global real estate market. With a number of countries recovering from the epidemic, the global real estate investment market saw a big change in early 2021 as the multi-family housing segment surpassed offices to become the new largest segment. In the first six months of 2021, $136 million where invested in the global housing segment, up 35 percent YoY.

In many parts of the world, working from home has made many people realize that the current home no longer meets the needs of use. The shift in housing demand has therefore spurred an increased number of transactions.

The Vietnamese market has not yet recorded a change in the combined working model like other markets, the housing area is still quite small, the travel time is short and most employees want to go to the office in order to communicate and connect with people.

While in many countries, the number of transactions has increased significantly in the first 6 months of 2021, the number of housing transactions in Vietnam decreased sharply. In Ho Chi Minh City, the number of villa and townhouse transactions in the second quarter of 2021 decreased by 33% YoY. There are several reasons for this: buyers become more cautious before the epidemic, the supply is more limited and the amount of inventory is a high-cost asset. Limited supply also increased when sales were delayed and legal issues were backlog of some projects.

Lack of housing supply unable to meet demand is an existing problem in some cities, including HCMC. Savills Vietnam, said that in the second quarter of 2021, the primary supply of villas and townhouses in HCMC was low. Restrictions in primary and secondary supply have led to increase in prices. However, with the development of many projects in suburban districts, the supply problem will be balanced in the future.

In the first half of 2021, primary transactions of speciality and townhouses in Ho Chi Minh City decreased by 51% year-on-year. Trading volume in Tokyo was also 24% lower than in the same period of 2019. Despite the decrease in transactions, the absorption rate in Ho Chi Minh City remained high at 65%. The reason for the drop in the number of transactions was a shortage of supply that pushed prices up and the inventory was mainly of assets valued at over $2 million.

Cities in China and Singapore in the first six months of 2020 also recorded a decline in trading. However, in the first half of 2021, transactions have rebounded, surpassing pre-pandemic levels. The housing market has always been considered the safest investment channel in China.

As for other markets around the world, Savills also pointed out, many US cities recorded a limited number of transactions between March and June 2020. However, in September 2020, the number of transactions was limited. Trading has surpassed the pre-epidemic average and remained at a consistently high level for the first 6 months of 2021. San Francisco was the market that recorded the largest decline, with trading volume down 57% in May 2020.

However, the market quickly recovered and returned to pre-pandemic levels in July 2020 and has remained high ever since. Meanwhile, the number of transactions and real estate values ​​in Miami has increased significantly, thanks to the wave of domestic immigration to this market. The transaction volume in the first half of 2021 here was recorded 34% higher than the same period in 2019.

The real estate market in Europe recorded a slower recovery in pre-pandemic volume. Trading volume in Paris remains low and the Madrid market only returned to pre-epidemic levels in March 2021. In the second quarter of 2021, the London property market recorded a high level of transactions, as buyers rushed to complete transactions before the government’s Stamp Duty Holiday program ended in end of June 2021.

It is forecasted that, in the medium term, when the distancing orders are eased and economic activities gradually return to normal, the number of global real estate transactions is expected to grow. Cities will still be places to live, work and play – so demand for urban real estate will continue to grow.

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