The report showed strong consumption recovery in HCM City and Hanoi in H1 thanks to increased supply and falling selling prices.

In HCM City, according to CBRE, new apartment supply in H1 soared by 189 percent in comparison with the same period last year to 16,412 products from 13 newly marketed projects, while sales surged by 70 percent to 12,506 products, the same as in 2018-2019.

However, the absorption rate in H1 was just 76 percent, which was much lower than the 100-130 percent in 2018-2019 because of restricted credit and interest rate increases, while the new supply mostly came from the high-end market segment, which always has a lower absorption rate.

VNDirect pointed out that at the end of Q2 2022, high-end apartment prices in the primary market cooled down because of credit tightening.

About the apartment market in 2022-2023, VNDirect said the new supply would recover from the low supply level in 2020-2021. There would be about 22,000 apartments available (up by 52 percent compared with the same period last year) out of 30,000 apartments (up by 40 percent) in 2022-2023 from the low levels in 2020-2021.

VNDirect predicted that the new apartment supply in HCM City would decrease by 20-30 percent to 5,000-6,000 in H2 2022 in comparison with 16,500 apartments opened for sale in H1. 

However, sales will be flat at 7,300 apartments because 4,000 apartments remained unsold in H1.

The high-end market segment is likely to lead the market and account for 60-80 percent of the total supply of apartments amid the decreased mid-end supply.

The prices of primary apartments in the suburbs of HCM City such as Binh Chanh and Binh Tan may exceed $2,000 per sq.m as prices in the areas have increased sharply over the last two years.

Since commercial banks tightened lending to the real estate sector and control over the issuance of corporate bonds has tightened, developers will be cautious when raising selling prices to boost sales and improve cash flow.

Meanwhile, the new supply of ready-built landed houses in HCM City is predicted to continue to fall short in 2022 because of limited land and slow settlement of legal problems. 

The new supply will come mostly from suburban areas such as Thu Duc district and districts 12 and Binh Chanh. 

VNDirect, citing tight control over credit and over land prices in "feverish" areas prone to speculation, predicted that land prices in Cu Chi, Hoc Mon and Binh Chanh districts would cool down in H2, especially in Cu Chi, where land prices soared by 72.7 percent in Q1 2022 compared with the same period last year.

In Hanoi, the supply of new apartments in H1 was stable, 8,165 apartments, up by 2.7 percent. High-end and mid-end products accounted for 55 percent and 45 percent, respectively, of total products for sale. The new supply mostly came from the western and eastern parts of the city where infrastructure conditions have improved. The sales increased by 33.6 percent to 10,788 because of high demand in the mid-end market segment. The absorption rate in H1 increased by 30.5 percentage points to 132.1 percent.

As in HCM City, high-end product prices in Hanoi dropped by 14.2 percent in H1 compared with early this year, while prices in the mid-end segment increased by 12.3 percent because of high demand. The primary apartment prices rose by 17.3 percent on average, reaching $1,872 per sqm in H1.

The new landed house supply dropped by 68 percent to 523 products, while sales continued to far exceed the new supply, increasing by 67 percent compared with the same period to 1,565 products. The absorption rate in H1 2022 reached 299 percent, which showed strong demand for landed houses in Hanoi.

The primary prices of landed houses continued an upward trend in the first half of the year with townhouse prices increasing by 10 percent compared with early this year and villa prices by 29 percent.

Analysts have predicted increases of 50 percent and 20 percent, respectively, to 25,600 and 30,000 in 2022 and 2023. The supply will be mostly from large projects in the eastern and western parts of Hanoi, including Imperia River View, Vinhomes Smart City and Vinhomes Ocean Park.

Thuan Phong