Savills quarterly market update reveals how grade A apartments are in high demand.
Vietnam’s economy continues to perform well. GDP is expected to reach its annual target of 6.7 percent having already increased 6.4 percent year-on-year. Credit growth is contributing factor to this which currently is at 11 percent.
Simultaneously the Asian Tiger is at the receiving end of record foreign direct investment. Up by 34 percent if compared to last year receiving USD 25.5 billion. Korea having contributed USD 6.3 billion of this. USD 3.7 billion has been injected into Ho Chi Minh City’s projects. The city that has received the most compared to anywhere else in the country. Consequently this has had a knock-on effect to the southern metropolis’ real estate market.
Savills have recorded an increase in the number of serviced apartments in the city. Up by 5 percent for the third quarter of this year, and 9 percent year-on-year. This coincides with the 28 percent hike in international visitors to the country and 16 percent increase descending upon Ho Chi Minh City. It is also a response to the growth of business that is being conducted within the country. There are more serviced apartments in the pipeline with a high concentration focused in on the city’s CBD.
3,600 new hotel rooms are expected to come to the city by 2020. As the city capitalises on the increase of tourism this has resulted in more competition within the hotel industry. Subsequently Savills have noted that hotel rates have decreased as a direct result.
Finally for the apartment sector there remains a steady stream of new stock making up nearly a third of all transactions. Grade A properties are performing the best increasing a staggering 149 percent quarter-on-quarter. From now until 2018 there is an anticipated 70,000 new units expected to be launched across 60 projects.
