Bright Economic Prospects
Vietnam’s economy showed signs of a slowdown, but its longer term prospects remained positive, which will help to drive future office occupancy. GDP growth in Q1 2017 was 5.1%, but is projected to hit 6.3% for the full year. Investment remained strong. Total FDI reached over US$12 billion in the first 5 months of 2017, up 10.4% year-on-year. Most of the FDI came from Asian investors such as those from Japan, Korean, China, Singapore, and Hong Kong.
Market Tends to Slowdown
New supply in Q2 2017 recorded over 7,600 units, down 5% q-o-q and 21% y-o-y, 38% of which came from Grade C projects. The majority of additional stock came from Eastern districts (69%), followed by the South, contributing to13% of the new market supply. Eastern districts also saw the largest number of sold units in the quarter, accounting for over half of the total transactions. In the short term, future supply will mainly be concentrated in the Eastern and Western districts, contributing to 39% and 26% of the market stock respectively.
Average Price Shows Slight Decrease
Overall average price of all grades in Q2 2017 stood at VND32.46 mil. per sq.m, (equivalent to US$1,428 per sq.m), up 4% q-o-q but down 3% y-o-y, mainly due to the lower price of large-scaled Grade A projects. Limited supply in the Central Business District (CBD) was the main reason for high prices in this region, which was more than triple that of prices outside of the CBD area.
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