In the trend analysis report for 2022 of the residential and commercial real estate market just released, Mirae Asset Vietnam Securities Joint Stock Company said that, The townhouse real estate segment is expected to recover in the coming period as the market in Hanoi continues to dominate with more than 3,000 units expected to be offered for sale in 2022. Meanwhile, Ho Chi Minh City will receive more than 1,500 apartments, 3 times higher than the previous year.
Current situation and prospect of commercial real estate segment
Regarding commercial real estate, according to Mirae Asset, in Hanoi, the total commercial floor area increased only slightly by 3% over the same period last year reaching 1.6 million m2 in 2021 and is also the third year in a row when growth rate is only less than 5%.The absorption area in 2021 decreased significantly compared to even 2020, mainly in commercial centers outside the central area, leading to a decrease in rents of 3.3% compared to the same period last year, reaching only about 24 USD/m2/month. The situation in the central area has improved when the average vacancy rate is only 13% but the rental price still tends to decrease, reaching an average of only USD 106/m2/month, down 2% from the previous year.
Mirae Asset expects that in the period of 2022 - 2024, Hanoi will have nearly 300 thousand square meters of floor space, mainly in non-CBD areas. Although supply has increased sharply, concerns about Covid still exist, Mirae Asset forecasts rents will decrease slightly by 2-3% this year.
Although Ho Chi Minh city is more severely isolated than Hanoi, the absorption area there will increase slightly in 2021, keeping the average absorption rate in the period 2020-2021 at 93-94%. The total commercial floor area in Ho Chi Minh City was almost unchanged in the past year, reaching 1.5 million m2. Rents in the central area decreased by 6.8% year-on-year in 2021, reaching $144/m2/month, while in the non-CBD area decreased by 4% to $33/m2/month. Mirae Asset expects the market to prosper in the year after four more projects are opened, increasing 137 thousand square meters of floor space. In addition, Mirae Asset also believes that the rental price will decrease slightly by 3-4% when the non-CBD area has the above supply, which are all projects whose opening date is delayed to 2022.
Current situation and prospect of residential real estate segment
Regarding the residential real estate segment, in Hanoi, the number of openings for sale in 2021 continued a slight decrease of 7% to approximately 17,000 apartments due to the negative impact of the Covid epidemic. In which, mainly the mid-end segment (accounting for two-thirds of total sales) and high-end segment (nearly one-third of sales). With a decrease in supply but increase in real demand, primary selling prices in all segments have increased significantly in the past year: the average primary selling price will reach 1,600 USD/m2 (about 36 million VND) in 2021, increase 13% over the same period and is also the highest increase in the past 5 years.
In the future, Mirae Asset forecasts that the situation will be more optimistic for homebuyers when the number of apartments offered for sale will increase again, reaching 26,000 - 28,000 units in 2022. In parallel with the skyrocketing supply, house prices will also slow down, which is expected to increase only slightly by 3-5% in the coming years.
Unlike the situation in Hanoi, Ho Chi Minh City is more heavily affected by the Covid epidemic, the number of openings for sale in 2021 here will only reach more than 14,000 apartments, down 22% year-on-year and the lowest since 2015.
However, the situation at the end of the year tends to be more positive when welcoming in the fourth quarter a large amount of goods accounting for 48% of the total supply of the year, mainly from the Vinhomes Grand Park project in District 9.
Although the supply is limited, house prices in Ho Chi Minh City have increased more slowly than in Hanoi, The highest was the mid-end segment, which increased by just over 4% compared to the same period last year, while the high-end and affordable segments increased by about 2%. Especially, the luxury segment decreased by more than 4% due to large supply from projects in An Phu, Thao Dien, and Thanh My Loi.
Mirae Asset predicts supply will recover significantly in 2022-2023 with more than 20,000 units expected to be offered for sale in 2022.
Along with that, house prices, according to Mirae Asset, will be flat. Although the supply increased, on the other hand, new projects opened for sale in the future were upgraded and moved to a higher segment.
Current situation and prospect of townhouse real estate segment
Regarding the townhouse real estate segment, similar to the apartment segment, the townhouse segment in Ho Chi Minh City was heavily affected by the lockdown, lead to a sharp drop in the supply in 2021 to the lowest level in the past 5 years, reaching just over 1,000 units, mainly concentrated in the East area of the city. The absorption rate reached nearly 85%, although not as high as the previous year, but still higher than the period before the Covid-19 epidemic, showing that the demand for this segment is still very large. The average price of this segment also increased slightly due to limited supply and high asking price during the year at new projects in District 9. Specifically, the average selling price was 84 million/m2 (up 11% over the same period) for townhouses, and 140 million/m2 (up 10% over the same period) for villas.
In contrast to Ho Chi Minh City, Hanoi had a prosperous year compared to the previous year in terms of supply when the market welcomed more than 2,700 apartments for sale, an increase of 40% compared to the previous year. The absorption rate also increased again when reaching nearly 80% (compared to only 60% in 2020). Despite the high supply and complicated epidemic situation, the selling price for villas increased by 16% over the previous year, reaching 134 million USD/m2,
shows that the demand for this segment in Hanoi is still extremely abundant.
Mirae Asset forecasts that in 2022, Ho Chi Minh City will receive more than 1,500 apartments, 3 times higher than the previous year, although it has not returned to the level of the years before the Covid epidemic. In the more distant future, HCMC plans to expand its land bank to the West, East and South (namely Hoc Mon, Binh Chanh, Nha Be, Cu Chi, and Can Gio districts), with projects from big real estate companies such as Vingroup, Khang Dien, Nam Long, and is expected to reach 8,000-9,000 apartments by 2024
As for Hanoi, it is expected that more than 3,000 apartments will be opened for sale in 2022, mainly from Hoai Duc, Hoang Mai and Dan Phuong in the West. The East region will also have a large supply from the Ecopark project. From 2022 - 2024, Vinhomes will also open for sale 2 projects Vinhomes Wonder Park in Dan Phuong and Vinhomes Co Loa in Dong Anh, with low-rise products making up the majority, providing about 2,000 - 3,000 units per year to the market.
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