Regardless of Vietnam Real Estate market having not escaped from crisis, many property enterprises running the risk of closure due to lack of capital, Mr Marc Townsend, Director General of CBRE Vietnam still forecast that in 2012, businesses and individuals can gain profits from opportunities in Vietnam real estate market, which has fallen into difficulties in the past year.
In the recent conference “Daring Prediction 2012” about real estate market recently held in Hanoi, Mr Townsend said that, Vietnam market will be more practical for some individuals and organizations in 2012. Some segments have seen declining price in the past three years. Real estate market has met many difficulties and lacked money flow due to limited capital flow into this market and buyers’ uninterestedness.
Statistically, in 2011, sales turnover of some automobile lines saw sharp increase over 2010, which means Vietnamese consumers still had money to spend. However, people only stand beside to observe happenings in real estate market. Gold price is set at a high record, and once there’s a sign of reduction in the price, people will transfer investment profit from gold to real estate. Despite significant decrease in successful transactions of apartments in Hanoi against previous years (45 percent against 80-100 percent) – caused by abundant supply, the number of apartments successfully transacted was not lower than the average of years. It means there’s still potential demand, similar to normal automobile sale turnover. It is estimated by many experts that there are more and more segment of apartments at medium price aiming at middle class.
While Hanoi apartment market saw secondary price increase in the past three year, that in HCMC has been rather stable. It is estimated by CBRE that housing price in Hanoi will stay still, similarly to the trend in HCMC in recent years. This is reinforced by evidences showing that the number of remaining condo apartments in Hanoi is about 16,000 ones while the number of those offered expectedly in 2012 is up to 22,000 ones.
Concerning retail ground market, especially plazas in Hanoi will see a clear division in term of position. Although there is no new plaza expected to inaugurate in the central area, Trang Tien Plaza reopening will change the outlook of retail sale at the best location in the city, connect with the area selling luxury items in the lobby of Metropole Hotel and Vincom Centre. Meanwhile, plazas located outside the centre, especially new ones, will have to face fierce competition to attract renters. The continuous addition to supply in 2012 will make the race severer and increase vacant area.
Mr Townsend also discussed about development of Hanoi, especially in the Eastern area, and connection with happenings in real estate market segments. Most segments will receive additional supply from the Eastern area. For example, office market received new 128,00 square meters from Eastern area in 2011, which increased vacant area to a record height of 200,000 square meters. With the addition from Eastern area in 2012, office rent cost will continue to see price decrease to persuade customers to change and expand the office. In 2012, the market will still be under management of renters. Accordingly, in coming time, the vacancy rate in hotels and apartments for rent in the Eastern will go up due to large additional number in 2012. However, national hotel managers will take actions in trading activities and mergers, while international managers still retain concern about Hanoi market.
Evaluating activities M&A in Vietnam which have been busy in the past year, especially of property enterprises, Mr Townsend said that “ In last 12 months, we have witnessed increasing M&A activities in Vietnam and some of these transactions will open door for more M&A activities in coming years, including 2012. In addition, for the first time, there have been deals in the market due to investors’ difficult liquidity. For those who made investment, the current price is too low while for others planning to enter the market, there’s opportunity to buy at real price. We believe that all these factors will boost up FDI capital in 2012.”
Given real estate project being formed, Hanoi’s infrastructure will have a new face. In next 4 years, Hanoi areas will be linked via upper highways, urban railway and new bridges. Thus, the psychological barriers of moving across the river or to suburb districts will be removed. The distance will no longer be an obstacle.
Luong Tuan
Vietnamese
