Home Business Lowest absorption rate of townhouses and villas in 5 years

Lowest absorption rate of townhouses and villas in 5 years

376
0

HanoiThe villa and townhouse market is operating quietly with quarterly absorption rate at the lowest level in 5 years.

According to Savills, the absorption rate of this market in Hanoi in the third quarter was only 19%, down 36 percentage points quarter-on-quarter and down 6 percentage points year-on-year. At the same time, the absorption rate for new supply is only 14%.

The trading volume for the whole quarter was only 210 times, down 81% QoQ and 54% YoY. In which, transactions in the segment of townhouses and townhouses accounted for 74%. Hoang Mai district has the largest volume of transactions, accounting for 28% of the total, followed by Dong Anh with 27%.

In addition, projects with high asking prices have quite a limited number of transactions. Accordingly, only 18% of total transactions are units with primary price range above 7,500 USD per m2; Units priced at $5,000 per square meter or more accounted for 31%, while the rest were units priced below $5,000 per square meter.

According to Savills, there are three reasons to explain the above situation. Firstly, the new supply dropped sharply, only 225 units, which is a decrease of 75% QoQ and 47% YoY. Primary supply reached 1,088 units, down 44% QoQ and 40% YoY.

Limited new supply comes from delayed launch activities and unresolved legal issues of some projects. More than 300 “hanging” projects are scattered throughout the districts of Hanoi. Currently, the government is looking for solutions as well as guiding investors to solve problems to soon put the project into operation or resolutely recover land that has not been put into use.

The second is high-priced inventory. Savills said, although most investors did not change the price list, the average primary price still increased significantly due to the lack of new supply… The market also recorded high-priced inventories and average prices. of sold units is about 15% lower than the average price of inventory.

These factors combined with the cautiousness of buyers during the pandemic caused a sharp drop in transaction volume.

However, Savills sees the market as promising in the near future. The good news is that construction works have been allowed to resume operations since near the end of September. Accordingly, from now to the end of the year, the Hanoi market is expected to welcome 650 apartments from 6 projects, mainly in the district. Hoai Duc and Tu Liem district.

In addition, about 4,000 units will be launched for sale in 2022, of which the West area accounts for 65%. Do Thu Hang, Senior Director, Consulting and Research Department, Savills, said that the supply and volume of transactions in the fourth quarter are expected to recover. The selling price will not change much because the market has grown quite strongly at the beginning of the year.

Matthew Powell, Director of Savills Hanoi, acknowledged that falling savings interest rates, record low bank deposits and home loan interest rates at the lowest level in the past 15 years are believed to be part of the reason. This causes cash flow to shift to other investment channels, including real estate.

“Some projects also offer incentives with 0% loan packages for a certain period of time. This is an opportunity for those who need to buy a house to live in,” he said.

The reduction in loan interest rates is also an opportunity to stimulate the market, allowing more people to have the opportunity to buy and own a home. He acknowledged, real estate will still be the investment channel of choice, but buyers need to consider the investment segment as well as the location of real estate in accordance with their financial ability, not “investing in real estate”. bet type”.

Duc Minh

.

LEAVE A REPLY

Please enter your comment!
Please enter your name here