Ho Chi Minh City’s real estate sector should create more green and open spaces as wellness-focused apartments see growing demand among discerning renters.
In its new MarketBeat report, Cushman & Wakefield found that customers are more attracted to well-being concepts in properties. Apartment buildings with more green spaces or open-concept designs are gaining traction, especially as people move past the COVID era. Many customers also prefer properties with more equipment that enhance healthcare value.
“Healthcare factors include more green spaces, open spaces, and advanced technologies enhancing the living environment standards such as air filtration and water purifier systems, or healthcare-focused services,” the commercial real estate service firm reported.
The report added that demand for mid-end units was also notably higher compared to luxury, high-end and affordable apartment units.
However, the third quarter also saw apartment supply decrease by 56% from the previous quarter, with sales volume also down by 54%. There were only 4,100 units available for sale from July to September.
The report detailed that credit control policies that took effect from the beginning of July this year have partly created barriers to mobilizing capital from commercial banks, making it difficult for investors to deploy new apartment projects.
The State Bank of Vietnam had requested credit institutions to strictly control credit for risky areas such as real estate, securities trading, corporate bonds, and BOT (build, operate, transfer) and BT (build, transfer) projects.
This has also impacted loan disbursement to customers, which led to a decline in sales and absorption rates. Only 4,150 units were sold in the third quarter.
Market demand seemed to slow down in July and August and started to recover from the beginning of September, according to the report.
Amidst low supply, the eastern part of HCMC saw the highest market share (80%), thanks to improvements in existing and upcoming infrastructure, including the opening of Thu Thiem 2 bridge in April.
To raise market demand, developers have started offering flexible payment schedules for buyers at credit limit time and launching various promotions and discounts over the past months.
However, Cushman & Wakefield is optimistic that the market will see supply rise to 171,000 units in the last quarter onwards, as constructions halted by the pandemic are now in full swing.
For landed properties, new supply in the third quarter grew by 130%, with 450 total units. Sales volume also increased by 17% QoQ. A landed property or landed estate is a property that generates income for the owner (typically a member of the gentry) without the owner having to do the actual work of the estate.
Thu Duc city is still the leading area in terms of new supply with 86%, notable projects are Soho Residence, Rivus, and Classia. The West and South areas of Ho Chi Minh City account for the remaining 14%.
Even for landed projects, buyers favor properties that promote “sustainability, wellness, and civilized community.”
Cushman & Wakefield estimates the total future supply of townhouses in HCMC will reach 9,500 units, mainly located in the East and West areas.