Savills Vietnam would like to announce Savills Property Price Index (SPPI) in October 2018 for Ho Chi Minh City and Hanoi with highlighted information as below:
In Q2/2018, the Savills residential index reached the highest level for the last five years at 96, increasing 1 point quarter-on-quarter (QoQ) and 3 points year-on-year (YoY).
Residential QoQ Index – HCMC
Total transaction volume surged to approximately 14,400 units, up 6% QoQ and 22% YoY. Absorption reached a five-year high at 56%, up 9 ppts QoQ and 24 ppts YoY. The strong performance was due to increasing sales from new Grade B and C projects. Grade B transactions had the highest growth of 31% YoY.
Until 2020, Grade C is expected to account for 62% of future supply. With high demand, developers will deliver Grade C units in western and outlying districts.
The office index has continually increased since Q2/2013. In Q2/2018, the index reached a new high of 95 points, up 2ppts QoQ and 6ppts YoY.
Office QoQ Index – HCMC
The CBD had greater improvement than the non-CBD due to a higher QoQ rent increase of three percent. In Q2/2018, the CBD office index reached 99 points, surging 3ppts QoQ and 9ppts YoY. With smaller rent growth of 1% QoQ, the non-CBD office index was 101 points, up 1ppt QoQ and 7ppts YoY.
As demand continues to grow whilst supply is limited, the CBD office index is expected overtake that of the non-CBD in the future.
In Q2/2018, the net take-up in the city was 36,100 m2, down -39% QoQ but increasing 42% YoY. New projects were the main contributor of the increase in take-up.
In Q2/2018, The Residential Index increased by less than 1 point (pt) quarter-on-quarter (QoQ) and decreased 1 pt year-on-year (YoY) to 104.81. The average selling price was US$1,196/m2, up 1% QoQ.
Residential QoQ Index – Hanoi
The average absorption rate was 27% with sales reaching approximately 7,500 units, up 31% QoQ and 11% YoY. Grade B dominated with a 59% share or 27% absorption, whilst Grade C performed well with 38% of sales. Grade A transactions decreased due to limited available stock and high asking prices.
In 2H/2018, 20 projects will supply over 14,300 units, mainly in Grades B and C. Long Bien District with a 19% share will be the largest supplier. With a 36% share, The West will continue as a residential hot spot.
In Q2/2018, The Office Index was 68.4, up 1.2 pts QoQ and 3.2 pts YoY, due to rent increases of 2.4% QoQ and 4.3% YoY.
The CBD index was up 0.4 pts QoQ and 3.2 pts YoY as occupancy slightly decreased by -0.4 ppts QoQ. With the improved rent of projects in the non-CBD, the area index increased 1.6 pts QoQ and 4.9 pts YoY despite a decline of -0.7 ppts YoY in occupancy.
Office QoQ Index – Hanoi
As current supply is limited, short-term rent in the CBD is expected to rise; two projects are expected to come online in 2019. A surge of new supply in the non-CBD area provides occupiers with more choice whilst maintaining fierce competition.