Savills Vietnam would like to announce Savills Property Price Index (SPPI) in October 2018 for Ho Chi Minh City and Hanoi with highlighted information as below:
In Q3/2018, the Savills Residential Index was 97, increasing 1 point quarter-on-quarter (QoQ) and 3 points year-on-year (YoY).
Total transaction volume was the lowest for six consecutive quarters at 10,000, down -30% QoQ and -13% YoY. Absorption of 53% decreased -3ppts QoQ but increased 21ppts YoY.
Grade A increased 58% QoQ from sales in a new upscale project in Thu Thiem NUA. Grade C accounted for 54% of total transaction volume.
Residential QoQ Index
Until 2020, over 124,000 units are expected to launch; Districts 2 and 9 will account for 55% of future supply. Infrastructure improvement and the planned Innovation Area will strengthen residential demand.
In Q3/2018, the Office Index was the highest for the last five years at 99, up 4 points QoQ and 9 points YoY. Improvements were due to quarterly increases in rent and overall occupancy.
The non-CBD had higher occupancy than the CBD, for the first time in five quarters at 98%, up 2 ppts QoQ and 4 ppts YoY.
The non-CBD office index reached 105, up 4 points QoQ and 10 points YoY. Despite stable occupancy, the CBD index increased to 102, up 3 ppts QoQ and 9 ppts YoY due to the 3% QoQ rise in rent.
Office QoQ Index
Total take-up was over 24,800 m2, down -31% QoQ and -18% YoY due to limited new supply and low vacancy.
In Q3/2018, The Residential Index decreased by less than 1 point (pt) quarter-on-quarter (QoQ) and year-on-year (YoY) to 104.5.
The average absorption rate was 23% with sales reaching approximately 6,300 units, down -16% QoQ but up 11% YoY.
Grade B dominated with a 51% share or 22% absorption, whilst Grade C performed well with 33% of sales. Grade A transactions had the highest growth of 232% QoQ and 40% YoY.
Until 2020, Grade C will account for 46% of future supply due to affordable selling prices, which appeal to buyers. With a 23% market share, Hoang Mai District will supply the most stock.
In Q3/2018, the Office Index was 69.4 pts, up 0.9 pts QoQ and 4.1 pts YoY. Whilst there was an upward trend, QoQ changes were minor given the low vacancy, suggesting the market could further increase.
Office QoQ Index – Hanoi
The CBD index rose by 0.2 pts QoQ and 4.8 pts YoY as performance continued to improve at a slower rate, due to limited space. The non-CBD index was up 1.3 pts QoQ and 5.5 pts YoY.
In the short-term, the CBD is expected to see rents increase with two new projects coming online in 2019.
A surge of new non-CBD supply suggests a dynamic market. The non-CBD is attractive to occupiers, including those previously located in the CBD.
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