Savills Vietnam’s Q3 report showed that HCM City witnessed positive growth signals, despite risks from inflation and increased costs. 

However, credit restrictions and closer review of applications for home loans have affected buyers’ payment capability.

In the apartment market, primary supply reduced to 6,600 products, which represented a decrease of 51 percent compared with Q2, but an increase of 120 percent compared with the same period last year. 

Thu Duc City and district 1 were the localities with the largest supply.

Inventories accounted for 66 percent of primary supply with 4,400 apartments, the highest figure since 2019. The supply is expected to increase to 4,220 apartments in Q4, which will come from 18 existing and four new projects.

According to Savills, the number of apartment transactions dropped by 89 percent compared with Q2 and the absorption rate was 15 percent. Meanwhile, new projects had an absorption rate of 35 percent, mostly because of high prices.

As for villas and street houses, the primary supply of ready-built houses surged to 800, of which new supply accounted for 75 percent and more than 68 percent came from Thu Duc City. The land supply increased to 270 plots, more than half of which came from projects in Nha Be district.

Nearly 390 villas and street houses were transacted, up by 4 percent QoQ and YoY. However, the absorption rate was low, just 49 percent, which was attributed to expensive primary supplies and a low number of buyers because of credit restrictions and high interest rates.

The demand has moved to nearby markets where housing products are offered at lower prices than HCM City. The absorption rate of villas and street houses in neighboring provinces was up to 72 percent.

Savills estimated that 3,600 products will be on sale in Q4. The supply will be in 13 districts, with 41 percent in Thu Duc, 23 percent in Binh Chanh and 10 percent in Binh Tan.

Savills Vietnam’s deputy CEO Troy Griffiths said that low liquidity in HCMC is creating opportunities for landed properties in neighboring provinces, including Binh Duong, Long An and Dong Nai, where the prices are lower.

As of September 28, the credit growth rate of the entire economy had reached 11 percent compared with late 2021, which means that credit can grow by 3 percent more in the last three months of the year.

Meanwhile, the State Bank of Vietnam wants to drive credit to production and business fields, rather than risky fields such as securities and real estate. Commercial banks, therefore, will tighten review over applications for home loans. Individual home loans account for two-thirds of credit to the real estate sector.

Duy Anh