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CBRE: Hanoi’s condo market is slowing

Hanoi’s condominium market showed signs that it is slowing down in the second quarter of this year, according to Nguyen Hoai An, director of CBRE’s Hanoi branch at a press conference last week to report on the capital city’s real estate market

According to CBRE’s research, there were 6,534 units launched from 19 projects in Hanoi in the second quarter, which is down 20% year-on-year. Newly launched projects in the west of the city accounted for 53% of new units, while those in the north of the city accounted for an additional 25% of new unites.

In the high-end segment, three new projects were launched including D’Eldorado 2, Starlake and Vinhomes West Point.  All of these projects are located in prime locations and received positive market attention. The share of units in the high-end segment increased from 15%in the first quarter of this year to 37%in the second quarter.

A total of 5,900 units were sold during the second quarter, down 22% from the same period, last year. The average selling price for developments in the second quarter of this year was recorded at $1,332 USD per square meter down by 0.4% quarter-on-quarter, but was an increase of 0.4% year-on-year.

There were slight adjustments to prices, averaging 0.3% and 1.5% across different market segments during the second quarter. The luxury segment in Hanoi is quite small, so prices were unchanged, while the mid-segment and affordable segments were more competitive due to the large demands.

Dang Phuong Hang, the Managing Director of CBRE Vietnam said: “This is a good signal because the market is stable. The second quarter of this year is considered as a period of adjustment in the Ha Noi property market before entering a new development stage.”

CBRE has forecasted that there will be 32,000 units launched in Hanoi in 2018, a decrease of 10% from 2017. The decrease in new units allows the market to absorb current inventory, which is a positive signal for the market.

In the second quarter, foreign investors paid increased attention to Vietnam’s property market as Vinhomes launched on the Vietnam stock exchange.  Vietnam’s positive consumer confidence is helping local developers to raise capital, as lenders and foreign investors looked favorably on the real estate industry and interest rates of loans have risen.
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