The property market of HCM City has experienced a marked slowdown recently (Photo: VNA) Hanoi (VNA) - Experts and businessesin Ho Chi Minh City’s real estate sector have mapped out recovery scenarios after the COVID-19pandemic passes, with the local property market having experienced a marked slowdown.
The market was rather gloomy in the first quarterof the year and almost froze in March and the first half of April, according toLe Hoang Chau, President of the HCM City Real Estate Association (HoREA).
Only ten projects obtained approval to sella total of 2,800 units during the first quarter, down 22 percent year-on-yearand nearly 70 percent against the fourth quarter of 2019.
Most landlords in the city reduced rentalsby between 10-30 percent during the period, according to Duong Thuy Dung, Directorof Research and Consulting at CBRE Vietnam.
Only 175 land slots were put up for sale, down74 percent compared with the fourth quarter of 2019 and the lowest number since2015. Only 142 (81 percent) were sold, down 77 percent.
A similar picture was seen in neighbouring provinces such as Long An, Dong Nai, Binh Duong, and Ba Ria-Vung Tau.
Tranh Khanh Quang, Director General of theAn Hoa Real Estate Investment JSC, blamed the stagnation on social distancing measuresintroduced to fight COVID-19, adding that his company has charted three future scenariosbased on the development of the pandemic.
CBRE Vietnam also put forward two scenariosfor HCM City’s apartment segment. If the pandemic was to be contained in June, therewould be about 28,000 new apartments on offer, up 5 percent, with prices also up5 percent. In its other scenario, if the pandemic was to pass in September, supplywould stand at only 15,000, equivalent to 40 percent of the total in 2019, withprices down 5 percent.
Trang Bui, Senior Director of JLL Vietnam, pointed to a future when office space primarilyserves jobs that require human interaction, and suggested enterprises set forthpost-COVID-19 business strategies.
A representative from DKRAVietnam said that supply of land slots would dry up as investors face financialpressures and become cautious. The apartment segment, however, may experience aslight increase in supply, of about 2,000-2,500 units, mostly in the eastern andsouthern parts of the city.
Su Ngoc Khuong, Senior Directorof Savills Vietnam, said it will be a difficult time for many domestic and foreigninvestors but huge opportunities exist for individuals and businesses that havestrong financial capacity and experience, especially in purchases and transfers.
Other experts suggested banksoffer incentives to help vulnerable firms maintain their operations and recoveronce the pandemic ends.
HoREA also proposed the Governmentextend land use tax payments from March to June and for individuals and householdsfor 12 months.
Ho Chi Minh City is the largest city in Vietnam and the economic hub of the southern region. Accounting for 0.6 percent of Vietnam’s total land area and about 9 percent of the country’s population, it is part of the southern key economic zone, which also comprises Dong Nai, Ba Ria - Vung Tau, Binh Duong, Long An, Tay Ninh and Binh Phuoc provinces. In the southern economic hub, over 3,000 projects across all sectors are supported by foreign capital, while the number of registered enterprises has exceeded 100,000.
In 2019, the city attracted 8.3 billion USD worth of foreign investment, with its labour productivity being nearly three times that of the whole country (299.8 million VND per person, an increase of 6.8 percent over 2018).
Meanwhile, the total number of international visitors to the city reached 8.5 million, a year-on-year increase of 14 percent with revenues up by 14.5 percent over 2018
The local gross regional domestic product (GRDP) reached more than 1.34 quadrillion VND, an 8.32 percent increase year-on-year.
Before the outbreak of COVID-19, the city set a target of achieving a growth rate of 8.5 percent for GRDP in 2020, with total private investment accounting for 35 percent of GRDP.
🦄 This year, HCM City also aims to have 44,000 new businesses, creating 135,000 new jobs./.
VNA
