At HCMC, residential Index slowed in Q2/2017 to 93 points, a 1 point quarter on quarter (QoQ) increase, leaving it unchanged year-on-year (YoY); the office index was 89, up 2 points QoQ and 7 points YoY.
Savills Property Price Index (SPPI)
August 2017
Savills Vietnam would like to announce Savills Property Price Index (SPPI) in August 2017 for Ho Chi Minh City and Hanoi with highlighted information as below:
At HCMC
Residential Index
With substantial mid and high-end supply the index significantly increased over 2016. However, it slowed in Q2/2017 to 93 points, a 1 point quarter on quarter (QoQ) increase, leaving it unchanged year-on-year (YoY).
Sales of approximately 11,700 units were up 36% QoQ and 68% YoY to reach a five-year high. Impressive Grade B and C performance had average absorption increase 10 ppts QoQ and 14 ppts YoY.
Grade C continued to perform well with 62% of total transactions. Grade B sales were over 4,200, a significant 35% QoQ and 24% YoY increase.
Since 2010, Grade C primary supply growth has been 15% pa. Closer to majority affordability, this segment, continued to out perform all others. Three thousand transactions were completed in Western districts.
Office Index
The office index in Q2/2017 was 89, up 2 points QoQ and 7 points YoY. Improvements were a result of 4% QoQ and 5% YoY rent increases. With 3 new-entrances, average occupancy slightly decreased -1ppt, to 96 percent.
District 1 newly-launched Grade A building pressured CBD performance, leading to a YoY occupancy decrease of -2 ppts. However, the CBD index rose 2 points QoQ and 10 points YoY after a 4% rent increase.
A slight 1ppt YoY occupancy increase was the main reason for an improved non-CBD office index of 1 point YoY.
Total office take-up was 25,500 m2, up 477% QoQ and 79% YoY. Grade A had the biggest quarterly take up in two years of over 19,000 m2.The new building had been pre-let in previous quarters.
At Hanoi
Residential Index
In Q2/2017, the index was at 106.1, down -1 point (pt) QoQ and 2 pts YoY. The average selling price was US$1,209/m2 or VND27.5 million/m2. Increasing secondary supply is causing segment prices to ease a little. Grade A primary prices also decreased with new projects offering under average prices.
Average absorption rate was 28%, up 1 ppt but down -7 ppts YoY. There were 6,790 transactions, up 5% QoQ and 13% YoY. Grade B had 42% share of sales, outperforming all other grades.
In the second half of the year, approximately 23,500 units from 45 projects will come online. Affordable residential projects with well-rounded facilities are forecast to attract the most buyer interest.
Office Index
The index moved up to 65.2 pts, gaining 2.2 pts on Q1/2017 and 5.8 pts YoY, mainly due to 3.7 ppts QoQ and 7.4 ppts YoY occupancy increases.
The CBD and non-CBD both registered QoQ and YoY improvements. Occupancy increases of 3.7 ppts QoQ and 2.4 ppts YoY put the CBD index up 3.0 pts QoQ and 1.6 pts YoY.
The non-CBD index steady upward trend continued 2.2 pts QoQ and 7.6 pts YoY as occupancy increased 3.7 ppts QoQ and 8.6 ppts YoY.
No new CDB supply over the next two years will likely ease pressure in the area and see average rents increase.
In contrast, the surge of new supply in the non-CBD area is providing occupiers more choice and pressuring developers to adjust asking rents to more competitive levels.