Vietnam’s property prices rising strongly

Construction News Vietnam
An artist’s impression of the Landmark 81 skyscraper in Ho Chi Minh City is seen in this undated handout photo provided by Atkins

Vietnam’s property prices rising strongly

Nominal house prices up 20.9% in HCMC, 4.8% in Hanoi during the year to Q1 2020

In Ho Chi Minh City, apartment prices surged 20.9% in Q1 2020 from a year earlier, to an average of US$2,452 per sq. m, according to Jones Lang La Salle Vietnam. Likewise in Hanoi, the capital, the average price of apartments rose by 4.8% y-o-y to US$1,474 per sq. m. in Q1 2020.

Demand and supply falling

In HCMC, take-up in Q1 2020 totalled only 1,980 units, less than half of the figures in the previous year, according to Jones Lang La Salle Vietnam. In fact, sales volume is equivalent to just 54% of total stock available for sale in Q1 2020, the lowest in two years. Similarly, take-up in Hanoi also dropped almost 42.2% q-o-q to 4,017 units in Q1 2020.

Supply remains limited. In HCMC, there were only 2,256 units launched in Q1 2020, the lowest level since 2014. In Hanoi, there were about 4,600 new launches in Q1 2020, equivalent to only around 65% of the previous quarter and the lowest level since 2015.

Rents, rental yields: yields are moderately good at 5%

The average rent for apartments in HCMC was $1,214.

Typical city centre apartment buying price, monthly rent (120 sq. m)
Buying price / Rate per month / Yield
Hanoi $1,500 / $1,315 / 5.50%
Ho Chi Minh City $2,100 / $1,214 / 4.45%

Recent news: The Vietnamese economy grew strongly by 7% in 2019 from a year earlier, following expansions of 7.1% in 2018 and 6.9% in 2017. Vietnam is expected to continue growing this year, albeit at a much slower pace of 2.7%, amidst the coronavirus pandemic.