JLL: Affordable Townhouses Remain Favourable
Vietnam, 15 January 2019 - Sales totalled 186 units in 4Q19, the lowest level since the market bounced back in 2014, impacted by the limited supply situation. However, demand for affordable products, especially those priced between USD 170,000–USD 250,000 per unit, remained strong, taking up more than 70% of total sales in 4Q19. This was mainly came from owner-occupiers as most available stock on the market was nearly completed and typically required large down payment, which was therefore less attractive to capital-gain investors.
As the research new launches totalled 147 units. New supply in the quarter came from newly launched projects but their scales were small, ranging from only 20-100 units per project.
Limited new supply in the RBL property market was mainly attributed to the deferred procedure in granting developers the necessary legal documents to launch projects. This was the main market theme throughout 2019 but the situation is expected to improve after 2020 Tet Holiday when many new projects are reported to launch then.
The primary price in 4Q19 escalated to USD 4,629 per sqm land, up 24.7% y-o-y while the chain-linked change ranged from 5 -10% y-o-y. While townhouse projects now tend to locate far away from the city centre and therefore their prices were slightly lowered this quarter, villa type witnessed a stronger price growth given their scarcity.
The limited new developments in both apartments and RBL projects have fostered the price appreciation in existing projects with good quality and thus resulted in the escalation of RBL’s primary selling price in the review quarter.
Large-scale projects such as Vinhomes Grand Park in District 9, Zeitgeist in Nha Be District and Van Phuc City in Thu Duc District will contribute a large proportion to 2020 supply pipeline, painting a brighter picture for the segment with more than 4,000 units launches in 2020.
The continued positive market sentiment coupled with limited supply will pave the way for further selling price increase.
Figure 13: RBL Total Launches
Figure 14: Average Primary Prices
USD/ sqm land
JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. Our vision is to reimagine the world of real estate, creating rewarding opportunities and amazing spaces where people can achieve their ambitions. In doing so, we will build a better tomorrow for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $16.3 billion, operations in over 80 countries and a global workforce of more than 93,000 as of September 30, 2019. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com.