The recently released Savills Vietnam’s H1 2024 market research report, published on July 9, reveals several positive indicators across most segments. Notably, commercial apartments have witnessed a significant boost in liquidity.
Specifically, in Q2 2024, the primary supply of commercial apartments increased by 14% quarter-on-quarter but decreased by 3% year-on-year to 5,635 units. Despite an increase in new supply and the reopening of old projects, the primary supply remained limited.
New supply in Q2 surged by 87% quarter-on-quarter and 215% year-on-year to 1,186 units from two new projects and eight subsequent sales phases, with Class B accounting for 71% of the new supply market share. The primary supply in the first six months of the year remained stable year-on-year at 6,751 units, with Class B holding a 57% market share, followed by Class C (39%) and Class A (4%).
The apartment market rebounded in Q2/2024 (illustrative image) |
According to Savills, the primary supply was mainly concentrated in the East (Thu Duc City) with a 57% market share and the West (Binh Tan and Binh Chanh districts) with a 29% market share.
Ms. Giang Huynh, Director of Research and Consulting at Savills Vietnam, attributed the successful launches to the recovering market confidence. The number of transactions in Q2 doubled quarter-on-quarter and soared by 606% year-on-year to 2,302 units.
Q2 transactions contributed nearly 70% of the total sales in the first half of 2024, benefiting from reduced lending rates, clear legal frameworks, and effective sales policies. The quarterly absorption rate reached 41%, up 18 percentage points quarter-on-quarter and 36 percentage points year-on-year.
The new supply boasted a healthy absorption rate of 72%, increasing by 2 percentage points quarter-on-quarter and 4 percentage points year-on-year. The absorption rate for existing inventory stood at 33%, improving by 17 percentage points quarter-on-quarter and 29 percentage points year-on-year.
Developers offered attractive sales policies, such as a 5% down payment for handover, fixed-interest rates guaranteed for 15 years, and discounts of up to 20%.
In the first six months of 2024, the average primary selling price reached VND 73 million per square meter. While the selling prices of Class B and C inventories remained unchanged, the temporary closure of some Class A projects led to a 41% year-on-year decrease in the average primary price.
Notably, apartments priced below VND 3 billion remained scarce, accounting for only 18% of the primary supply in the first half of the year. These properties were mainly located more than 10 kilometers from the city center.
“Affordability will be a significant challenge, as less than 5% of future supply in the next three years is expected to fall into this segment,” said Ms. Giang. “The growing demand for housing, coupled with limited supply, may lead to a shift in demand to neighboring areas. With expanding infrastructure, satellite provinces like Binh Duong and Dong Nai will improve the supply of affordable apartments, offering nearly 24,000 units in the next three years. Notably, buyers from Ho Chi Minh City accounted for 80% of the transactions in new apartment projects in Binh Duong during the first half of 2024.”
Looking ahead to the second half of the year, Savills Vietnam anticipates the launch of over 6,200 apartments across 19 subsequent sales phases. By 2026, approximately 35,600 units are expected to enter the market. Thu Duc City will hold a 52% market share, followed by District 7 with 12% and Binh Tan with 8%.
Mr. Troy Griffiths, Deputy Managing Director of Savills Vietnam, commented that while the supply of commercial apartments in the primary market remains limited, there are many positive signals. He expressed optimism that policy revisions, new planning, and the implementation of key infrastructure projects would bode well for this market segment in the future.
Son Nhung
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