Real estate market report (March 28th, 2009 - April 2nd, 2009) The property market can recover sooner than expected
According to the information from the Review of Market and Prices, March’s property price index followed the February’s continuous growth, with an increase of ULPI-Land by 0.89 points (4.56%), and ULPI-Apartment by 0.39 points (1.47%).
After two months, land and housing prices increased by 11% (5.92% in February) and those for apartment increased by 6% (4.34% in February). According to the experts, if such prices continue to soar or to be stable in April, we will be allowed to say that land and housing markets would recover sooner than expected. Property prices have soared in March thanks to three main reasons such as: 1/ the banks’ interest rate support policy, 2/ the economy stimulation to be continuously developed, and 3/ the 3.1% Vietnam’s economic growth rate on the first quarter (despite of much slower than the same period last year, this rate is still a bright point for the global economy). Foreign direct investments (FDI) hit more than $6 billion, in which $3.8 billion are from businesses capital increase. It proves that investment in Vietnam still brings positive effects and keeps the investors with a good mind. Especially, the US government applied strong methods aiming to support the domestic property market, such as spending $1,000 billion to re-buy banks’ non-performing loans (mainly related to property), or pump another $400 billion for Fannie Mae and Freddie Mac property tycoons to guarantee liquidity and stimulate the US property market as well as to recover the trust of worldwide property and financial circles.
According to the DiaOcOnline’s report, on the last days of March, there were about 500-600 new assets per day launched on the DiaOcOnline.vn website’s transaction floor of Property Listings. More than 10,000 assets are available to be transacted on its floor. The number is much higher than before the Tet holidays (where each day only accounted for 300 assets sent to DiaOcOnline.vn by the customers, with a total number of assets daily available around 6,000-7,000 items).
Partially increase, decrease
Currently, the global property market hasn’t escaped yet from quietness. The garden housing market, in particularly in the suburbs of Hanoi, gets signs of prosperity. The architect Nguyen Thanh Nam, general director of Archi Investment Corporation, said that the garden housing market is still busy with real transactions.
According to Nam, this property segment is less affected than the general market, because its orthodox investors maintain good working methods and investment scale as well as time to complete property operation models and services. So, these products are always “optimized-exploited”, in terms of use value. Besides, the western area of Hanoi gets a huge advantage: it is adjacent to big tourism areas and beautiful nature, where the demand to relax is very high. Resorts in this area are in an overloaded state, especially for the peak season: customers must reserve a week very soon, to book their rooms. It creates heat for this market segment.
In HCM City, the market also knows a reverse increase-decrease: the Eastern area slightly rises from 3% to 10%, and the Northern area drops from 5% to 10%, compared to January, 2009. The additional compensation for moving households (on the Thu Thiem project) with rather big amount of money (about VND24,000 billion as expected) is considered as a reason to stimulate the purchase power of many customers in the Eastern area. Many households use their compensation money to buy land because they see the difference between the compensation price and the land price after the 2008’s crisis reduces. Two weeks before, a 6m x 16m foundation land plot, on the Khang Dien project in Phu Huu Ward, District 9, was advertised for sale at VND650 million. But now, it is at VND800 million, which means that its price increased by VND1.5 million/sq/m. Similarly, some projects’ prices, like Dong Duong 1, Khang An, Dien Phuc Thanh, (Phu Huu Ward, District 9), were at VND6.5-7 million per sq/m, and now at VND7.5-8 million per sq/m. However, the strongest increase has been recorded with the following projects: 174ha and 143ha areas in Thanh My Loi Ward, District 12. These two areas’ project foundation land prices rose from VND2 million to VND4 million per sq/m. For instance, Trung Tien Company previously advertised their project for sale at VND13 million/sq/m, but is now at VND16 million/sq/m.
Contrary to the Eastern area, the Northern one’s foundation land market is decreasing. Explaining this phenomena, Hoang Ngoc, a real estate broker in the District 7, said that a series of luxury apartment projects, such as Sunrise City (Nguyen Huu Tho, District 7), or Riverside Residence (Phu My Hung urban area), have been launched on the market, making many customers temporarily stop their investments to survey the market, instead of buying foundation land. Moreover, apartment buildings prices ready to be transferred to customers are considered as relatively suitable for living purposes.
Furthermore, less attractive legal procedures are also a cause of the land price decrease in the Northern area, during the past days (averagely plummeting from 5% to 10% compared to January, 2009).
After two months, land and housing prices increased by 11% (5.92% in February) and those for apartment increased by 6% (4.34% in February). According to the experts, if such prices continue to soar or to be stable in April, we will be allowed to say that land and housing markets would recover sooner than expected. Property prices have soared in March thanks to three main reasons such as: 1/ the banks’ interest rate support policy, 2/ the economy stimulation to be continuously developed, and 3/ the 3.1% Vietnam’s economic growth rate on the first quarter (despite of much slower than the same period last year, this rate is still a bright point for the global economy). Foreign direct investments (FDI) hit more than $6 billion, in which $3.8 billion are from businesses capital increase. It proves that investment in Vietnam still brings positive effects and keeps the investors with a good mind. Especially, the US government applied strong methods aiming to support the domestic property market, such as spending $1,000 billion to re-buy banks’ non-performing loans (mainly related to property), or pump another $400 billion for Fannie Mae and Freddie Mac property tycoons to guarantee liquidity and stimulate the US property market as well as to recover the trust of worldwide property and financial circles.
According to the DiaOcOnline’s report, on the last days of March, there were about 500-600 new assets per day launched on the DiaOcOnline.vn website’s transaction floor of Property Listings. More than 10,000 assets are available to be transacted on its floor. The number is much higher than before the Tet holidays (where each day only accounted for 300 assets sent to DiaOcOnline.vn by the customers, with a total number of assets daily available around 6,000-7,000 items).
Partially increase, decrease
Currently, the global property market hasn’t escaped yet from quietness. The garden housing market, in particularly in the suburbs of Hanoi, gets signs of prosperity. The architect Nguyen Thanh Nam, general director of Archi Investment Corporation, said that the garden housing market is still busy with real transactions.
According to Nam, this property segment is less affected than the general market, because its orthodox investors maintain good working methods and investment scale as well as time to complete property operation models and services. So, these products are always “optimized-exploited”, in terms of use value. Besides, the western area of Hanoi gets a huge advantage: it is adjacent to big tourism areas and beautiful nature, where the demand to relax is very high. Resorts in this area are in an overloaded state, especially for the peak season: customers must reserve a week very soon, to book their rooms. It creates heat for this market segment.
In HCM City, the market also knows a reverse increase-decrease: the Eastern area slightly rises from 3% to 10%, and the Northern area drops from 5% to 10%, compared to January, 2009. The additional compensation for moving households (on the Thu Thiem project) with rather big amount of money (about VND24,000 billion as expected) is considered as a reason to stimulate the purchase power of many customers in the Eastern area. Many households use their compensation money to buy land because they see the difference between the compensation price and the land price after the 2008’s crisis reduces. Two weeks before, a 6m x 16m foundation land plot, on the Khang Dien project in Phu Huu Ward, District 9, was advertised for sale at VND650 million. But now, it is at VND800 million, which means that its price increased by VND1.5 million/sq/m. Similarly, some projects’ prices, like Dong Duong 1, Khang An, Dien Phuc Thanh, (Phu Huu Ward, District 9), were at VND6.5-7 million per sq/m, and now at VND7.5-8 million per sq/m. However, the strongest increase has been recorded with the following projects: 174ha and 143ha areas in Thanh My Loi Ward, District 12. These two areas’ project foundation land prices rose from VND2 million to VND4 million per sq/m. For instance, Trung Tien Company previously advertised their project for sale at VND13 million/sq/m, but is now at VND16 million/sq/m.
Contrary to the Eastern area, the Northern one’s foundation land market is decreasing. Explaining this phenomena, Hoang Ngoc, a real estate broker in the District 7, said that a series of luxury apartment projects, such as Sunrise City (Nguyen Huu Tho, District 7), or Riverside Residence (Phu My Hung urban area), have been launched on the market, making many customers temporarily stop their investments to survey the market, instead of buying foundation land. Moreover, apartment buildings prices ready to be transferred to customers are considered as relatively suitable for living purposes.
Furthermore, less attractive legal procedures are also a cause of the land price decrease in the Northern area, during the past days (averagely plummeting from 5% to 10% compared to January, 2009).
Le Dinh
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