HCM City: Housing supply increases sharply(08/10/2015)

Seventeen existing and new projects made a total of 9,550 apartments available in the real estate market of Ho Chi Minh City in the third quarter of this year, announced Savills Vietnam, the largest property company in the country, at a press conference on October 7. Of the figure, 5,220 units were sold, up 4 percent compared to the second quarter, with Districts 2, 7 and Binh Thanh accounting for 57 percent of the transactions.

  • Steel making in Vietnam is in danger of coming to a full stop and the root cause of its demise lies in the fact China is increasingly dumping vast stockpiles of steel in markets around the globe say leading market analysts. To make matters worse, these same analysts and others in the steel industry are sounding the alarm over the increase in the number of anti-dumping investigations initiated against Vietnamese manufacturers.Of particular note, Thailand has initiated three investigations in September on steel sheets and related products. However, this is just the latest in a long string of investigations that other nations have instituted.
  • Loans in the property sector surged this year, increasing by 70 percent in comparison with the lowest level in 2012 to touch 333 trillion VND (14.8 billion USD). Statistics from the State Bank of Vietnam (SBV) showed that in the first eight months of the year, the total loans in the real estate sector rose by 10 percent from 2014. This is a relatively high growth rate, as the rate was 4.33 percent during the same period in 2014.
  • Some 7,862 apartments from 26 projects in Ho Chi Minh City were sold during the third quarter of 2015, said Head of CBRE Vietnam’s Research and Consulting Department Duong Thuy Dung at a press conference in the city on September 29. According to CBRE, high-end apartment sales have soared, accounting for 35 percent of the total apartments transacted during the first nine months of this year.
  • Average annual space rent at industrial parks (IPs) in Ho ChiMinh City is much higher than in Hanoi as shown in a recent report by property service provider Savills Vietnam.
  • According to the State Bank of Vietnam, in the first eight months of the year banking credit grew at 10.23 percent compared to 4.33 percent a year earlier. It is expected to grow at 15-17 percent this year. It might well be considered good news indicating the economy is on the mend. But there are some worries, especially since a considerable amount of money has been lent to buy or develop property, one of the four categories of borrowers with the highest bad debts as of April 30, according to the National Financial Supervision Committee. It had its genesis in the bursting of the property bubble in early 2008. By then a huge number of individuals and companies had borrowed money from the banks at interest rates as high as 25-27 percent to speculate in property. When the inevitable bust came, no one was able to sell their properties and repay the banks. It also took down many property developers, who were caught in exactly the same trap – an irrational demand causing a scramble to build even if it meant borrowing at ridiculous rates.
  • Although supply has recently surged, there is not likely to be a real estate bubble in Vietnam, said CBRE’s Operational Director Richard Leech at a press conference in Hanoi on September 29. According to Leech, speculation has been common in recent years but current purchases are being made largely by individuals for their own residential demand and, through support from newly secured legal frameworks, the real estate market is in stable conditions.
  • The PM has recognized Quang Ngai city in the central Quang Ngai province as a second-tier one.
  • Office rent prices in Hanoi are currently decreasing by 10-20%, while more suitable renting options are available for tenants, according to Greg Ohan, Director of the office leasing services section of CBRE Vietnam – a subsidiary of the world’s largest commercial real estate services and investment firm.
  • The FLC Group started the construction of the FLC Hoang Long Industrial Park (IP) in the central Thanh Hoa Province on September 22, earlier than scheduled.
  • The PM has approved an overall plan to establish the Mong Cai border gate economic zone in the northern province of Quang Ninh to become a dynamic and sustainable economic area of the province and a key economic region of the North by 2030, with a vision toward 2050.
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