Around 6,300 apartments were changed hands in Ho Chi Minh City in the first three months of 2016, down 18% quarter-on-quarter (q-o-q) but up 49% year-on-year (y-o-y), Savills
Vietnam has said in a report.
Absorption rate was 17%, declining four percentage points (ppts) q-o-q and y-o-y due to abundant new supply in recent quarters, with Grade A having the highest absorption rate at 23%, the real estate service firm says.
forecasts approximately 67,600 apartments to enter the market from Q2/2016 to 2018.
According to the report, two projects added 40,800 square meters of new retail space in the quarter, causing the total retail stock to reach more than one million square meters, up 4% q-o-q and 17% y-o-y.
The average gross rent decreased 2% q-o-q and 1-% y-o-y while average occupancy slid one percentage point q-o-q and y-o-y to 93%.
In the office segment, the market had the best quarterly performance in the last four years, says the report.
“The average occupancy was highest at 96%, up one ppt q-o-q and four ppts y-o-y. Better occupancy was derived from increased occupancy in Grades B and C,” it adds.
Four three-star hotels entered the market in the quarter, increasing the market stock by one ppt q-o-q and 14% y-o-y. As of Q1/2016, there were approximately 15,000 three to five-star hotel rooms in HCM City
from 117 projects.
Average occupancy slid one ppt q-o-q and two ppts y-o-y. In addition, recent supply increases caused tougher price competition. This quarter, the average room rate slipped 5% q-o-q and 2% y-o-y to $81/room/night.
During 2016-2018, a large future supply of more than 5,000 rooms will enter the market which might put more pressure on overall performance, especially the upscale segment, says the report.
According to HCMC People’s Committee, the city is expected to welcome 5.1 million international and 21.8 million domestic visitors in 2016. Tourism turnover is targeted at $4.7 billion.