High-end Condos Booming, Apartment Rents Rising Despite Increasing Supply.
Vietnam economy rose dramatically about 7.1% in 2018, increasing from 6.8% in 2017 and 6.2% in 2016. This speedy growth would be continuing in the next several years, remarkably towards rising apartment rents and high-end condos. Projected annual GDP growth rate of 6.5% both this year and in 2020, according to the International Monetary Fund (IMF)
In Ho Chi Minh City, prices of luxury condominium units soared by 17% to an average of USD $5,518 per square meter in 2018, compared with the previous year. However, price of a luxury apartment starts at USD $5,000 per square meter in the central districts.
Feliz en Vista, a luxury condominium development in HCMC’s District 2, is currently priced between USD $232 and USD $290 per square foot (sq. ft.), according to Bloomberg. This means that a 1,722 sq. ft. four-bedroom condo unit is offered from USD $400,000 to USD $500,000. Almost all of the units at Feliz en Vista were already sold by end-2018. Only the fourth tower Somerset Feliz is now open for booking with just a limited number of apartments.
There is a notable rise in demand of wealthy locals.
More rich and middle class Vietnamese are turning their attention on investing in real estate. Estimates could show that, Vietnamese property investors are surging and they originally work in various industries.
In fact, homeownership rate in Vietnam exceeds 90%, which is one of the highest rate in the world.
Apartment rents are rising while the total amount of residential property is getting bigger.
In Q4 2018, apartment rents per month in Hanoi ranged from US$13 to US$32 per square meter. The price is up 5% from a year earlier. The average occupancy rate in the capital city remained unchanged at 86% in Q4 2018.
Meanwhile, in HCMC, serviced apartment rents ranged from USD $16 to USD $34 per square meter. It rose 4% from the previous year. The total stock of rental apartments in HCMC was over 5,700 units in 2018, up 20% from a year earlier. It is the highest growth in five years.
From 2019 to 2020, a total of 1,100 rental apartment units from nine projects in Hanoi would be ready to enter the property market. An additional 1,700 units from 12 projects would also be completed in the next three years in Ho Chi Minh City.