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EVOLVING DEMANDS BEING MET IN HIGH-END SEGMENT
Despite COVID-19 restricting the flow of foreign buyers and investors to Vietnam, positive signs were reported from local buyers in the last quarter of 2020 for high-end residences, brightening up 2021.
Singaporean developer Keppel Land Vietnam successfully received bookings for all units of the first three towers of its latest project named Celesta Rise in Ho Chi Minh City in one morning event held at the end of November.
The astoundingly quick absorption rate of Celesta Rise proved that the market demand remains strong and developers who have good products can still attract buyers by the droves.
Indeed, Celesta Rise was one of the most sought-after residential developments in the urban Saigon South area thanks to its strategic location as well as unique and fascinating facilities.
Diversifying products and adding technology to serve customers from beginning to end are the way leading developers are now trying to attract customers’ attention.
Andy Han, CEO of SonKim Land, Corporation explained why the company’s luxury integrated development The Metropole Thu Thiem has been a runaway success.
“Vietnamese love buying property. From the central location to ongoing and planned infrastructure improvements, the development was popular from the onset,” he said at a talk held in Ho Chi Minh City last month themed “Real estate and tech sector in a changing world”.
“But what has been really driving sales is The Metropole’s ability to meet the demand of a post-pandemic world: non-touch design and the innovative 99 per cent dust filtering ventilation system. With people spending more time indoors, there is an increased demand for larger apartments of three bedrooms, too.”
In 2020, 65 per cent of apartment units launched in Ho Chi Minh City were in the high-end and luxury segment. Figures from CBRE show that the city’s east along with Thu Duc City have been contributing a major portion of property supply, including high-end and luxury products and is forecast to provide 44 per cent of the total supply until 2025. Meanwhile in Hanoi, nearly 70 per cent of launches were mid- and high-end products.
A primary trend putting wind in the sails of the Vietnamese residential property market is the increasing population and income levels. Local developers are also starting to look beyond the bounds of their northern and southern bases of power, with Ho Chi Minh City-based developers rolling out projects in the capital and vice versa.
According to Nguyen Van Dinh, general secretary of the Vietnam National Real Estate Association (VNREA), even if foreign investment flows into real estate have dropped due to the pandemic, the setback is only temporary as many foreign investors are still waiting for the opportunity to invest in Vietnam.
“The global supply chain has been disrupted and European and North American enterprises are considering leaving China, presenting an opportunity for Vietnam to receive a new wave of foreign investment, which will benefit the real estate sector,” he said.
The positive sentiment is shared by the largest global real estate developers. These investors from South Korea, Singapore, Taiwan, and Japan among others are all looking for assets and cooperation opportunities with reputable domestic enterprises.
However, the forecast recovery will likely be moderated by several factors, such as the prolonged legal difficulties that have been haunting the real estate sector this year.
Despite Vietnam’s strong showing in pandemic control, the coronavirus remains a living threat across the globe and even a working vaccine will take several months of clinical testing before it can be put into wide-scale use.
It is hoped that things can return to normalcy around the second or the third quarter of 2021, with intentional flights reopened, said Dinh from VNREA.
Viet Nam’s economic growth is projected to expand 6.8% per year in the medium term 2021 – 2025, according to the latest forecast jointly conducted by the National Center for Socio-Economic Information and Forecasting (NCIF) and the United Nations Development Program (UNDP).
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Most apartment building projects of developers like Tan Hoang Minh Group, Sunshine Group, Sun Group, and Hateco Group, located in Ba Dinh, Tay Ho, and other districts reported poor take-up rates during the year of the pandemic.
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The 13th National Party Congress is expected to set the country’s average annual growth rate of 6.5-7 per cent from now until 2025, when Vietnam may become a higher middle-income nation. To this end, restructuring public investment and state-owned enterprises will be more critical in order to create a level playing field in the economy.
The first phase of the Gemalink international port, which is located in the southern province of Ba Ria-Vung Tau, was put into operation with the welcoming of the first commercial vessel on January 19.