The apartment market in Hanoi
is expected to go up further in the rest of 2016, with both sales activity and finished projects likely to maintain the growing trend, said commercial real estate services firm CBRE Vietnam
in its recent report.
More supply will be added to the market in the fourth quarter (Q4) of this year, scattering over different developing areas of the city, the firm said.
According to CBRE, developers of 16 projects launched more than 6,800 new apartments for sale in Q3, up 14% quarter-on-quarter (q-o-q), but down 38% year-on-year (y-o-y), with 36% coming from the West.
Mid-end products still dominated the new launches, although new supply from high-end and luxury apartments also increased significantly. In particular, there were around 3,000 apartments from these segments launched in this quarter, accounting for 45% of total new launches.
A total of 5,279 units were sold during this quarter, rising 52% q-o-q. The sale rates of high-end segment continued to show increasing trend since the start of 2016 with an average growth rate of 13%.
In the first three quarters of 2016, the number of apartments sold reached an estimated 14,200 units, in which mid-end apartments accounted for nearly 50%.
CBRE noted that the upward trend of prices was evident in the primary market, with prices experiencing an increase of 2% on average. Meanwhile, the average price slightly went down 0.2% q-o-q in the secondary market.
Performance of Hanoi's apartment market in Q3. Source: CBRE
In the office segment, the new supply came from VP Bank Tower (Grade B) in Midtown area, bringing the total office supply in the city to over 1.1 million square meters, of which 64% of Grade B.
During the review quarter, asking rents in the city’s office market declined compared with those of the previous quarter. In particular, average asking rents of grade A slipped 0.8% q-o-q to $28/sqm/month while those of grade B decreased 1.7% q-o-q to $17.8.
The U.S. real estate services firm said that Mipec Riverside Long Bien has joined the retail market, providing 24,000 sqm. Total supply of Hanoi’s retail market is currently at 720,000 sqm, equivalent to an increase of 2.3% q-o-q and 18% y-o-y.
Average rents of Hanoi shopping centers remained stable. Rent in CBD, due to relatively better performance, slightly increased 0.52% q-o-q while Non-CBD’s rental rate dropped 0.96% q-o-q.
Q3 was an active quarter marking the entrances of foreign retailers such as Auchan, Miniso. Certain local retailers who have presented in HCMC for a few years are now expanding to Hanoi. Galaxy cinema just opened its first cinema at the end of July while Circle K has reached 35 stores within one year in Hanoi.
Three new shopping centers are expected to open in Q4/2016, adding a total of 111,000 sqm in new space. These new projects include two malls from Vingroup and one prominent mixed-use development which already secured anchor tenants.