After the first half of the year sharply reduced the supply, the HCMC real estate market is expected to have a mutation in the third quarter if the Vinhomes Grand Park Project is launched for sale as expected.
The Vinhomes Grand Park project is under construction and is expected to launch in September. Photo: Trong Tin
According to the Department of Construction of Ho Chi Minh City, in the first 6 months of 2019, Ho Chi Minh City People's Committee has accepted investors for 3 new commercial housing projects, down 16 projects compared to the same period in 2018. Meanwhile, the number of documents submitted by the enterprise to the Department of Construction is many times higher.
Also according to the report of Ho Chi Minh City Department of Construction, in addition to 3 projects proposed by the Department of Ho Chi Minh City People's Committee, the Department is also proposing to the City People's Committee 10 other commercial projects. This is a much lower figure than the same period last year.
According to the Ho Chi Minh City Real Estate Association (HoREA), in the past 6 months, Ho Chi Minh City has only 24 projects eligible to sell houses formed in the future, with a total of 7,313 apartments (houses), decreasing 10 projects (decreasing 29.4%), decreasing 2,336 units (decreasing 24.2%) compared to the past 12 months.
Land lots continue to be the leading investment choice channel
The high-end segment decreased by 43.8% (2,227 units compared with 3,965 units in the same period last year). Affordable apartments decreased 34.7% (1,249 units compared to 1,914 units in the same period last year).
And a report of DKRA Vietnam Real Estate Market Research Company said that in the second quarter of 2019, the City market had 4 newly launched land plots, providing about 291 plots, increasing by 12%. Compared to the previous quarter supply (approximately 259 plots). The rate of consumption on new supply reached about 92% (267 plots), an increase of 19% compared to the previous quarter (224 plots).
Similarly, the segment of villas and townhouses, in the second quarter of 2019, there were 3 notable projects launched for sale, providing about 383 units, an increase of 109% compared to the previous quarter (183 units). Consumption rate reached about 75% (about 288 units), an increase of 138% compared to the previous quarter (121 units).
Meanwhile, the apartment segment experienced a sharp decline in supply in the second quarter of 2019. Specifically, in the second quarter of 2019, there were about 12 projects, including 3 new projects and the next 9 phases of the previous project, supplying 2,559 units, equaling 95% compared to the previous quarter (2,700 units), equaling 29% of the same period last year (8,724 units). Sales reached about 2,047 units (80% of new supply), equaling 88% compared to the previous quarter (2,326 units) and 28% compared to the same period last year (7,302 units).
Looking forward to the third quarter
Mr. Le Hoang Chau, President of HoREA said that the decline in supply in many segments of the real estate market affects the city's budget revenue. In 2018, the revenue from the land of Ho Chi Minh City is about VND 22,600 billion, accounting for 9.32% of the total budget revenue. Compared to 2017, a decrease of about VND 4,570 billion (decreased 16.8%). The collected land use fee of the project decreased by VND 4,037 billion (decreased 22.5%).
The result of city budget revenue in the first 6 months of 2019 has not reached 50% of the plan. Land use levy in the first 5 months of 2019 decreased by 60% compared to the same period in 2018.
Also in the worry that the city budget will be seriously affected because the real estate market decreases, Mr. Le Duy Minh, Deputy Director of Ho Chi Minh City Department of Taxation, said during the period when the real estate market in Ho Chi Minh City was in crisis. During the crisis, the budget revenue from the City's land decreased seriously.
In the first 6 months of 2019, only 3 commercial housing projects were accepted by the HCM City People's Committee. Photo: Le Toan
Specifically, in 2013, the amount of land use revenue of Ho Chi Minh City was only about VND 5,600 billion (only half of the revenue in 2012 of VND 10,000 billion). But in 2014, the market recovered gradually and revenue began to increase to about 8,298 billion dong. In 2015, the revenue increased to VND 21,720 billion. In 2016, it reached VND 24,632 billion.
However, by 2018, the City real estate market decreased by 34.2%, so the revenue only reached about VND 22,600 billion, making the Ho Chi Minh City budget lose VND 4,570 billion compared to 2017.
The scarcity of supply in the past 6 months is due to Mr. Chau, who said that due to problems in the Land Law, this difficulty is limiting the development of the real estate market, especially the apartment and ground land market.
Forecasting the real estate market in the remaining 6 months of 2019, Mr. Pham Lam, General Director of DKRA Vietnam said that, with the land plot segment, the new supply in the third quarter may increase compared to the previous quarter, but not surpassed 2018 and the land continues to be the leading investment choice channel.
As for the apartment segment, the supply may increase from the previous quarter and fluctuate between 6,000 and 7,000 units. The demand of the market may increase slightly compared to the second quarter, but it will hardly be as high as the same period last year.
Supply of townhouses and villas may decrease slightly compared to the second quarter, ranging from 200 to 300 units. According to the observation, the real estate market in Ho Chi Minh City has cooled continuously since the middle of 2018 due to the supply congestion. However, the demand is still high and the rate of new projects is recorded very well. The lack of supply, while the great demand has pushed up prices in Ho Chi Minh City.
DKRA Vietnam said that the current market is complicated and unpredictable, but the market is adjusting itself to a more positive level, aiming to be more transparent and sustainable. Thereby, all components including investors, brokers, authorities, buyers must also be flexible and proactively adjust for better changes.
However, many investors believe that the market will fluctuate if Vingroup Corporation officially launches the Vinhomes Grand Park Project in District 9, Ho Chi Minh City in September 2019 as previously expected. This judgment is reasonable, because brokers selling this project have begun taking deposits, Vingroup has also started to communicate and build the project.
According to Gia Huy