The Ho Chi Minh City residential market saw its sales volume and prices increase in the third quarter given improving economic conditions and the support from lower lending rates, property services firm CBRE said Tuesday.
“More energy and movements” have been seen in the property market this quarter, Marc Townsend, Managing Director of CBRE Vietnam, said at a press briefing on Tuesday.
He said middle-income earners, for the first time, began to use bank loans to buy homes.
“This is the first time we have seen buyers of affordable housing and middle-end housing looking to borrow money from the bank, not necessarily from their friend and families,” said Townsend.
Lending rates have dropped to 13 percent from 20 percent in 2011.
Vietnam’s gross domestic product grew 5.6 percent in the first nine months of this year. Coupled with accelerating foreign investment, this helped boost manufacturing and exports and helped the country counter the low credit growth.
A CBRE report released at the press briefing showed that the sales volume of the Ho Chi Minh City property market increased by 8.6 percent quarter-on-quarter and 95 percent year-on-year to roughly 3,300 units sold in the third quarter.
Photo: Diep Duc Minh.
While the affordable segment continued its strong rise, the sales growth in high-end condominiums was relatively modest, the report said.
CBRE said buyers at high-end developments comprised a high proportion of investors who often try to avoid selling or buying houses in "ghost month" (lunar July that mainly fell in August).
In contrast, end-users and especially those on a limited budget buy a house whenever they are able to obtain finance, the firm said.
Townsend said that with prices having bottomed out, most developers are moving their prices up a few percent and shortening payment terms they have offered in the past.
Prices on the primary market increased up to 4 percent from the second quarter across all segments and the same trend was reflected in the secondary market, according to the report.
With sales improving and buyers’ confidence increasing, developers have become “more and more confident in launching their products,” the report said.
Around 3,100 units were launched during the third quarter, a 96-percent jump compared to the same period last year.
Duong Thuy Dung, Head of the Research and Consulting Department at CBRE, noted: “It has been a long, seven year slog with disappointments and broken promises on house delivery. However, recent positive sales results and busy launching events suggest that we have now arrived at a point where the worst of the market is behind us.”