HCMC luxury residential segment expects bright prospect for 2020

The condo market in HCM City is expected to face challenges this year, according to industry experts.

 In the fourth quarter (Q4) of 2019, Ha Noi saw fierce competition in the serviced apartment segment, according to Savills Vietnam.

Vietnam is seen as one of Southeast Asia’s most attractive real estate markets for foreign investors, so local property developers can easily seek partners through merger and acquisition (M&A) deals.

The supply of homes plummeted on the local market in 2019, as inspections of construction, investments and land use at some property projects left a chilling effect on investors.

HCM City’s condominium recorded a significant fall in new launch supply and new pricing levels across the market in 2019, according to CBRE Vietnam’s latest report “Property Insight - Residential Market Outlook 2020”.

With 50 five-star hotels and 68 four-star hotels being built last year, the luxury segment now has 466 hotels with 97,098 rooms.

The supporting industry boosted the development of Việt Nam's industrial real estate market last year, according to CBRE Viet Nam Co, Ltd.

 While there are few, if any, signs of the real estate bubble bursting in 2020, the Ministry of Construction said that land prices could increase in some areas.

A number of projects located on the bank of the Saigon River in the second city could face the axe from next month after an inspection by Ho Chi Minh City People’s Committee found that they violated building regulations.

Delays to approvals for new office developments, along with proposed land price hikes, are unsettling the prospects for the Ho Chi Minh City office segment.

The policy on allowing foreigners to own houses associated with land in Vietnam has been studied and considered very carefully.

The number of apartments eligible for sale in HCMC and Hanoi is estimated to fall 25% this year, reaching 43,000 units, according to a report by property platform batdongsan.com.vn.

Some 65.7 million more people will live in urban areas in Vietnam by 2050, and this represents investment opportunities worth up to US$80 billion for the nation’s green construction sector over the next 10 years.

Hanoi’s recently-released list of housing ventures for foreign homebuyers may draw in less interest than expected as reputable developers are not involved, and complex legal barriers tower on the horizon.

Growing demand from e-commerce users is putting pressure on existing supply chains, facilities and warehouses.

Buyers of condotel units are at stake since they have made their investment decisions based on what brokers have said and on their trust in project developers without obtaining sufficient information.

The real estate market in 2020 is likely to face multiple challenges, Nguyen Tran Nam, chairman of the Vietnam National Real Estate Association (VNREA), told the 2019 Vietnam Real Estate Forum on Wednesday.

Although real-estate development projects are required by law to incorporate parks and gardens in their area zoning, many investors in HCM City are blatantly disregarding this. 

Authorities in HCM City are planning a review of State-owned housing, funds and assets in an aim to improve management and use of state-owned land and properties in the city.