Condo price in Hanoi goes down, supply rises

In the last quarter of 2011, the volume of offered condominium projects surged 5% quarter on quarter while the secondary offering price declined in all areas of the capital city, the Saigon Economic Times reported, citing Savills Vietnam’s latest report.
The report was announced on January 6.

Accordingly, in Q1, Hanoi had 31 projects being offered with 10,100 apartments. However, the absorption ratio of the whole market reached only 12%, down 20 percentage points against the previous quarter.

Do Thu Hang, a representative of Savills consulting firm, said that the average secondary offering price went down in all districts due to low liquidity. She noted that the supply of condominium mainly is those who have real demand. Their demand focuses on medium and low-price apartment market segment.

“Condos at less than 3 billion dong each are suitable to people’s affordability”, she added. Savills reported that condo Grade A reached the lowest selling rate of only 2% while condo Grade C gained the highest selling rate in Q4, around 20%.

During the forth quarter of 2011, the price of villas and associated houses in Hanoi also slumped and the price reduction trend took place in all areas. Hanoi’s secondary market had 117 projects being offered (under the trading contracts of capital contribution deals) with total 38,600 villas and associated houses. Yet, there were small number of transactions in the segment.

Hang explained that the supply of villas and associated houses was affected by high bank loan rates as well as credit tightening policies that are expected to be continued in 2012 whereas the price of villas and associated houses calculated based on each unit, each square meter is very high.

Average villa price ranged between 20.7 million dong and 203 million dong per sqm or 6.2 billion dong and 47 billion dong per unit in Q4. Such high prices made capital mobilization harder.

Most projects which had been offered earlier 2011 were adjusted down in prices so as to be suitable to the current market movement. – Vietbiz24

Tags: Vietnam Property market, Vietnam property sector, vietnam real estate market

Posted by VBN on Jan 11 2012. Filed under Real Estate. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry