CBRE releases market review for Vietnam 2011

 

CBRE Vietnam recently released their market review for Vietnam 2011.

According to CBRE affordable residential properties are holding their value better than any other segment, in light of the challenging economic conditions. Secondary prices in the affordable segment dropped a slight 0.6 per cent in the fourth quarter, the smallest drop of any segment in primary and secondary markets.

The lure of a settled life and finding a piece of land to call home is an attractive proposition to many Vietnamese, and this keeps the residential market stable according to Marc Townsend, managing director of CBRE Vietnam.

“The affordable residential segment is showing relatively strong capital value performance in the challenging economy. This is because historically there has been less speculators and investors in the segment. Most of the demand in the affordable segment comes from end-users, so the transactions we see in this segment represent the real demand of people looking for a place to live” Townsend said.

Over the last year, secondary prices in the affordable segment have declined only 0.7 per cent year-on-year, to US$722 in the fourth quarter of 2011. That is compared to the other three segments, mid-end, high-end and luxury, which saw price declines from 4.4 per cent year-on-year to 7.5 per cent year-on-year.

Demand for serviced apartments increased in 2011 and demand came primarily from 3 sources: professional expatriates from Asia and the West, Vietnamese returning from overseas and wealthy Vietnamese.

Grade A office vacancy plummeted 6.1 per cent quarter-on-quarter in the fourth quarter of 2011. This comes as a result of landlords capitalising on opportunities to sign new tenants at the end of the year. With the market expecting the economy in 2012 to be only slightly improved on that in 2011, in the fourth quarter some Grade A landlords shifted their priority from asking higher rental rates to securing tenants.

Shopping centre rents throughout Ho Chi Minh City continued to decline both on a quarter-on-quarter and year-on-year basis. Shopping centres in the CBD suffered more than shopping centres in non-CBD locations, with CBD shopping centres seeing rents decline 5.3 per cent quarter-on-quarter. This is compared to the 3.7 per cent decline in non-CBD shopping centre rents in the same period.

Tourism in the country continued to go from strength to strength especially in the coastal areas with Phu Quoc leading the coastal market with 20 per cent year-on-year increase in revenue per available room, and Phu Quoc is expected to be an attractive destination for investors in 2012.

The Vietnamese government introduced a number of government decrees in 2011 including a non-agricultural land use tax brought in by the Ministry of Finance which focused the pilot scheme on Hanoi, Can Tho cities and Bac Ninh province. Another measure introduced in 2011 was trying to identify taxation areas and exploit the database of local agencies on tax and natural resources. The first guidance scheme on the assessment on environmental impact and guidelines for requirements and procedures of development projects were also introduced last year.

Vietnam’s infrastructure is a work in progress but progress is being made. In 2011 roadways, metro lines and a new airport terminal at Da Nang’s airport were opened or near completion. In 2012 four main roads are being constructed in the Thu Thiem urban area, construction on Saigon Bridge No.2 will start and ways to improve the bus system are being looked at.



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  1. [...] CBRE Vietnam recently released their market review for Vietnam 2011. [...]

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