Ho Chi Minh City
recorded a total of 12,900 transactions in the residential property market in the second quarter of this year, property consultancy firm Savills Vietnam
said in a release Wednesday.
There were approximately 6,900 sales in HCM City in the quarter, up 10% quarter-on-quarter (QoQ) and 34% year-on-year (YoY). The overall absorption rate was stable QoQ at 17%, down two percentage points (ppts) YoY.
Although Grade A sales increased 74% in the city, absorption went down five ppts due to abundant new supply. Grade B was the market driver with 49% of total sales, followed by Grade C with 47%.
The residential index for the city increased inched up one point QoQ and three points YoY to 92.7. The apartment price index has increased steadily since Q3/2015.
Savills Vietnam attributed better construction progress and flexible and prolonged payment schemes from developers to the price improvement and good sales in Q2/2016.
The QoQ index is expected to follow an upward trend next quarter, the firm said.
In Hanoi, the residential index was 104.7 points in Q2/2016, down three ppts QoQ and 3.5 ppts YoY, with an average selling price of 26.3 million dong ($1,178) per square meters.
The overall primary absorption rate was approximately 35%, up one ppt both QoQ and YoY, similar to the previous quarter, with 6,000 sales, up 7% QoQ and 30% YoY.
Grade B remained the market driver with 73% share of sales, lifting absorption by three ppts QoQ to 40%, due to good performance in large-scale projects.
Circular 06 of the State Bank of Vietnam (SBV), which tightens regulations on asset-liability management and real estate loans, has yet to make an impact on the real estate market, but by the end of the year its effects may become clearer, Savills Vietnam said.
Circular 06, which took effect in July, lowers the current 60% maximum ratio for short-term funding for loans longer than 12 months to 50% by the end of 2016 and to 40% by the end of 2017.
Under the circular, the risk weights for real estate loans have been raised to 200% by the end of 2016 from 150% currently.
Although this increase is lower than the 250% risk weight that the SBV proposed in February, the new rule will limit banks’ appetite to lend to this high-risk sector, given banks’ already-weak capital ratios, according to Moody’s.