VIETNAM REAL ESTATE MARKET OUTLOOK AT THE END OF 2020 – RECOVERY FROM GOOD SIGNALS
Real estate has proven its rapid recovery and future potential development, whilst the Vietnamese economy is influenced by COVID-19. In particular, by the end of 2020, there has been many clear positive signs in the HCMC real estate market:
1. Apartment segment leads the customers’ interest:
In the Q3/2020 report of batdongsan.com.vn website, apartment receives the most customers’ interest with 29%. Transactions made in the Southern region are mostly in mid-range segment, according to the data of Ministry of Construction. Price continuing to increase by 1.5-2% shows the real demand is on the rise; however, shortage of supply is making the imbalance between the proportion of segments. Yet there are new mid-range projects launched in Q3, which leads to most of transactions are in the secondary market. As demand surpasses supply, the interest in apartment segment is expected to rise in 2021.
2. Real estate in the East reaches Top "hot spots":
According to the Vietnam Market Report 2020 of Asiapropertyhq website, District 2 and District 9 will be two "hot spots" in the near future. The establishment of Thu Duc City has accelerated urbanisation towards the East, leading the price of real estate in this area increases where some places achieve records of 2-3 times rise compared to before. This is explained from 3 reasons: strategic planning, well-built traffic structure and infrastructure and hub of connection. The East is also leading in Ho Chi Minh City and the Southeast Vietnam in the number of real estate projects, with locations adjacent to key transportation projects of the region such as Metro Line 1, Lo Lu Street, Ring Road 3, etc.
3. Many RE developers launch new products to stimulate demand:
End of the year usually is the ideal time when many developers announces new projects to meet the purchasing power and finalise before the year ends. Special preferential policies are applied to stimulate the demand, leading to high and active consumption of transactions. Particularly in October 2020, 10 housing projects were licensed and have provided 9,147 products. The transaction rate promises to increase in Ho Chi Minh City and surrounding areas from now to the 2021 Lunar New Year.
4. Green homes will take the lead:
People are caring more about green real estate amid the booming scene of COVID-19 epidemic and climate change. Many have realised that the health is closely related to the living environment and surrounding amenities; therefore, besides fully functional, the favourite real estate must be safe for health and environmentally friendly. Green, smart homes with sustainable initiatives will lead the housing trend in the coming time.
Despite that, the real estate market is also facing 2 obstacles. First, the deviation easily generates rumors of housing bubble and disturbs the market. Second, the finance of buyers is unstable under the impact of epidemic that creates hesitation. Therefore, caution and flexibility are necessary in searching for project information as well as defining the buying purpose. Planning to provide 3,000 - 5,000 “green” apartments per year, EZLand aims to lead the mid-range market in 2021 and onwards whereas increasing absorption rates by quality, functional and innovative projects. The expansion of green apartment supply in the region helps EZLand increase its credibility and brand coverage in the HCMC real estate market.