Post on 05-Jun-2018
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VIET NAM APARTMENT SECTORTHE GREAT WAVE
Q2 in HCMC there was a 67% YoY increase in sales to 11,600 whilst in Hanoi it was 13 % to 6,800.
In HCMC Grade C accounted for 62% of sales, while in Ha Noi, Grade B dominated with over 42%.
Savills invites you to review the key structural elementsthat shape the apartment market.
Every real estate project is closely monitored by our Research team. For sales to be recorded an agreement (SPA) between developer and purchaser must be made. Transactions are constantly assessed for accuracy and are released at the end of each quarter at our Market Review.
Savills is Vietnams leading residential broker so we benefit from keen market insight. We have operated in Viet Nam for over 20 years. Our people, our methodologies and our integrity are what makes Savills the premier international property agency in the region.
At
First timebuyers are
increasing in share.Is the market
taking abreather?
What is thesustainable level of
demand?
Willsecondary prices
continue toincrease?
2
HANOI
DANANG
HCMC
Over 22 yearsEstablished in Vietnam
since 1995. The 1st International Property
Firm in the Country
68,000 sqm leased in 2016
200 mil US$Total value
of residential sales in 2016.
SAVILLS VIETNAM
Over 5.2 M sqm Under management in 2016 (over 36 buildings in HCMC and over 18 in Hanoi).
Our Research and Consultancy Services are the most innovative in Vietnam
Number one agency in volume of transactions with over USD 100M transacted each year.
Savills Viet Nam | 03
4
75 24.3
Malaysia100 3.4 1
Singapore
Thailand
52 23
Philippines
44 14.4
40 35.9
Laos
Indonesia
54 24.3
Cambodia
21 24.6
35 24.4
Myanmar
34 23.7
Vietnam
Urbanisation ratio(%)(2015)
Household size(person/HH), 2016
Urbanisation rate(%)(Avr. 2012-2016)
How to read it?
Source: CIA World Factbook, 2017
OVERVIEW
THE GREAT WAVE
In a regional context, Viet Nam has a low proportion of urban population but a huge flow of rural migrants, resulting in a high urbanization rate. This factor combined with a large but declining household size, results in robust new dwelling formation.
Savills Viet Nam | 05
Dwelling replacement need is high, Approximately 27% of Viet Nams urban population are living in low quality housing.
HCMC and Ha Noi have 58,000 and 42,000 households formed each year.
The emerging paradigm of single living in urban areas.
Annual household formation, 2016
Low quality housing (%), 2015
Single urban households (%)
1989 1994 1999 2004 2009 2014 2019
4.6 4.65 4.7 6.23 8.1 9.1 10.1
HCMC - 58,000 Ha Noi - 42,000
Source: GSO
Source: Savills Research & Consultancy
Source: UN-Habitat, 2015
Number ofpeople (Million)
% of urbanpopulation
139
22%
46
38%
35
25%
31
27%
18
41%
3
55%
3
31%
APARTMENT SEGMENT
INVESTMENT UNIVERSE
THE GREAT WAVE
Apartment demand is sustainable.
Source: Savills Research & Consultancy
0
100,000
200,000
300,000
400,000
2009 2010 2011 2012 2013 2014 2015 2016 1H2017
Nationwide market (HCMC & Ha Noi)
Market size in 2016
Total supply
Take-up
HCMC and Ha Noi are strong regional markets
Ha Noi and HCMC lead regional cities and yield strongly.
Source: Savills Research & Consultancy
Source: Savills Research &Consultancy and Numbeo
Gross rental yield (%, pa)
Favourable investment channel, with limited alternatives.Current yield (%, pa)
12-month savingrates
(2nd-tier bank)
12-month savingrates
(1st-tier bank)
Apartmentrental
7.4% 6.6% 6.5%USD3%
Gold (SJC)-0.8%
VN-Index20%
0
10,000
20,000
30,000
40,000
0
1
2
3
4
HCMC Bangkok Jakarta Hanoi KL Phnompenh Yangon Vientiane
5.8HCMC
4.3Manila
4.0Bangkok
5.2Jakarta
3.7Singapore
4.8KL
Primary sales - LHS
Sales per 1,000 pp - RHS
Hanoi7.4
6
Savills Viet Nam | 07
STRONG HOUSING DEMAND
OUTLOOK
Source: Savills Research & Consultancy
Source: Numbeo.com, 2017
Source: Savills Research & Consultancy
Apartment affordability
Hand-overs
Buyer profiles
Recent hand-overs will pressure the rental market.
First-time home buyers and occupiers are increasing in share.
Ha Noi HCMC
0 20 40 60 80 100
Q1
Q2
Q1
Q2
Q3
Q4
9%
11%34%
28%61%11%
23% 23%
19%
8%26%66%
45%36%
54%
29%62%
55%
2016
2017
SpeculationBuy-to-letOccupying
2018
2017
2016
2015
(Times)30
20
10
0
Viet Nam Thailand Cambodia Singapore Indonesia Philippines Malaysia
Price To Annual Income
Big opportunityfor affordable
housing
25% (YoY)in primary supply
107%(YoY)in transactions
Projects(<US$900/m2): 1H/2017
0 10,000 20,000 30,000 40,000010,00020,00030,00040,000
OUR SERVICES
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Troy GriffithsDeputy Managing Director
+84 (0) 933 276 663TGriffiths@savills.com.vn
Pham Van DaiHead of Research - HCMC
+84 (0) 933 276 663PVanDai@savills.com.vn
Do Thu HangHead of Research - Ha Noi
+84 (0) 912 000 530DThuHang@savills.com.vn
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