The apartment segment in Ho Chi Minh City posted its lowest sales and absorption rates for five years in the second quarter of 2021, according to the latest quarterly report from Savills.

Sales were close to 1,400 units, down 35 per cent quarter-on-quarter and 36 per cent year-on-year, while the absorption rate stood at 37 per cent, down 5 percentage points (ppts) quarter-on-quarter and 10 ppts year-on-year.
Grade B led in sales, with 49 per cent of the total, and achieved the highest absorption rate, of 52 per cent. The remaining inventory is strongly priced.
Transactions from new supply accounted for 77 per cent of the total in the second quarter, while absorption was 63 per cent.

Primary supply was down 25 per cent quarter-on-quarter and 18 per cent year-on-year, to the lowest level ever of under 3,700 units. There were limited launches and low inventory, and ten projects were temporarily halted to adjust pricing.

New quarterly supply from three projects and the next phases of six existing developments totaled more than 1,600 units, down 26 per cent quarter-on-quarter and 23 per cent year-on-year and accounting for 45 per cent of primary supply. Grade A and B dominated new supply, with 76 per cent.

There will be some 120,000 apartments on the market by 2024. Thu Duc City, with its high rate of urbanization and infrastructure growth, accounted for the largest market share, of 44 per cent.

It is expected that 6,800 units from 22 projects will come on to the market in the second half of this year, primarily Grade C apartments, which will account for 47 per cent.

In Hanoi, meanwhile, quarterly sales of approximately 4,800 units in the second quarter represented an increase of 4 per cent quarter-on-quarter, with absorption standing at 23 per cent, up 4 ppts quarter-on-quarter. Grade B and C accounted for 94 per cent, with new launches seeing absorption of 46 per cent.

One new project and the next phase of six existing projects provided approximately 1,600 units, down 60 per cent quarter-on-quarter and 74 per cent year-on-year. Launches were at their fewest for five years. Amid rising anxiety during the fourth outbreak of Covid-19, developers scaled back launches. Primary stock was down 13 per cent quarter-on-quarter and 27 per cent year-on-year, to 21,300 units.

Eighteen launches and the next phases of two projects will supply approximately 14,300 units during the year as a whole. Most will be Grade B, with 81 per cent, and be located in Tu Liem district, with 47 per cent, Hoang Mai 23 per cent, and Long Bien 11 per cent.

Hanoi has approved the Housing Development Program for 2021-2030. It will identify local demand to build different types of housing, and also identify the links between housing and urban development.