Green light for Thu Duc City establishment boosted investments sentiments in Eastern Districts
HCMC apartment for sale research, 3Q20
According to JLL latest HCMC apartment for sale research, supply continued to improve q-o-q with 4,968 units officially launched, up 30% q-o-q. Up to 56% of the launches were contributed by Vinhomes Origami project in District 9. However, in terms of number of projects, there were only four signing SPA this quarter- one of the lowest in the history, which highlighted the limited supply situation due to the legal issues persisting. Moreover, as second wave of Covid-19 and Hungry Ghost month fell in Aug-Sep period, many planned sales events were deferred until late September or early October. Affordable and Mid-end segments remained in the lead, contributing up to 93% of the total launches, the remaining 7% belonged to Luxury with only one project.
Eastern Districts saw stronger demand than others
Sales totalled 4,975 units in 3Q20, with the Vinhomes Origami accounting for 53% of the total, indicating demand was going in tandem with supply. In addition to Vinhomes Origami, other projects in Eastern districts also saw quick absorption, such as Precia and The River Thu Thiem. This was attributable to the Government’s approval for the establishment of Thu Duc City, enhancing investment sentiments in these districts. Nevertheless, the cautious sentiment under Covid-19 situation carried on in other parts of the city as sale appeared to be in a slower mode. The tendency not to buy houses during Hungry Ghost month also had some impacts on the sales.
Prices continue to increase y-o-y under limited supply
The overall primary price1 reached USD 2,423 per sqm in 3Q20, an increase of 17.2% y-o-y but down 6.2% q-o-q. The quarterly decrease in overall primary price was caused mainly by the entrance of new projects, predominantly in Affordable and Mid-end segments with lower-than-average price. In general, the developers still keep the price level upward amid limited supply. In order to encourage sales during Covid-19, they offered attractive sales policies such as extension of payment schedule, zero-interest for longer periods, or exemption from management fee for up to two years.
The last quarter of the year is expected to be more dynamic with about 8,000 – 10,000 units set to enter the market, which will bring the total number up to about 20,000 at end-2020. This is still about half of the level recorded in the peak period of 2017-18 as the legal issues in many projects remained unsolved. Demand is expected to stablise till year-end.
 Prices exclude VAT and sinking fund.
 Official launch figures. Projects are considered as officially launched when the Sale Purchase Agreements are signed, typically upon foundation completion.
 Sale rate is end-of-period figure.
Source: JLL Research
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