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Cushman & Wakefield Research

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City and market analytical reports covering emerging markets in the Asia Pacific region by global real estate solution provider Cushman & Wakefield
 

MarketBeat Hanoi, Vietnam Apartment For Sale - Q4 2011

Apr 06, 2012
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MARKETBEAT
HANOI, VIETNAM

APARTMENT FOR SALE
A Cushman & Wakefield Research Publication

Q4 2011

ECONOMIC OVERVIEW
According to the General Statistics Office (GSO), Vietnam's GDP growth is estimated to be around 5.89% this year, lower than the 8% to 9% in the years before the global economic crisis in 2008. Inflation in the fourth quarter has eased due to the tightened monetary policy, which rose to less than 1% each month, much lower than the rate a few months earlier. Inflation in Vietnam in 2011 is forecast to be 18.13%. FDI inflow to Vietnam in 2011was estimated to reach US$14.7 billion, down 26% from the previous year, but total disbursement hit US$11 billion, the same as in 2010. FDI in the real estate market this year is expected to be the lowest in five years, accounting for only 5.8% this year, ranking it fourth on the FDIattraction list. Among the investors, Singapore was the largest, followed by The Republic of Korea and Japan.

OUTLOOK
It has been forecasted that dozens of projects will be launched for sale next year. Due to an oversupply in the market and tightening monetary and fiscal policies of the government, apartments for sale in the upcoming period will continue to face challenges and the downward price trend is understandable. Correspondingly, the absorption rate is likely to still be low. The mid and low-income apartment segment is considered to be the "focus point" of the Hanoi real estate market. ECONOMIC INDICATORS
NATIONAL GDP Growth CPI Growth 2010 6.78% 9.19% 2011 5.89% 18.13% 2012F 6% 10.5%

STAGNANT MARKET
The residential market in the fourth quarter of 2011 continued to show signs of stagnation. In this quarter, the total number of units launched for sale for all segments was approximately 1,800. Among which, Grade B accounts for around 74% and the rest was for Grade C. There was no new supply to the market in Grade A. Available units for sale of Grade B increased by approximately 28% compared with that in previous quarter. Due to poor sales performance, some developers have postponed their project launch plans. Asking prices of all grades are following a downward trend. Under payment progress pressure, many developers and secondary investors race to sell products at "soft" price and offer a discount policy of 5% to10% as well as other promotion programs like lucky draw, gifts, etc. The quoting price for Grade A averages at US$2,500 per square meter (/sq.m), Grade B US$1,600/sq.m. and Grade C US$991/sq.m. Comparing with the third quarter, prices were reduced by about 3% on average.

ASKING PRICE OF ALL SEGMENTS Q4 2011

PRIMARY MARKET PERFORMANCE Q4 2011

WEAK DEMAND
Currently, demand comes mostly from end-users and the remaining from long-term investors who have idle capital and can hold the units until hand-over. Buyers are still waiting for a further drop in prices in the condo market, which is one of the main reasons behind the current stagnant trades.

HANOI MARKET STATISTICS
SIGNIFICANT RESIDENTIAL PROJECTS LAUNCHED IN 4Q 2011 BUILDING Hoa Binh Green City Hyundai Hillstate Daewoo Cleve Skyview Berriver Long Bien LOCATION Hai Ba Trung Ha Dong Ha Dong Cau Giay Long Bien EXPECTED COMPLETION 2014 2013 2017 2013 2014 UNITS LAUNCHED 200 742 150 60 180 SALE PRICE 1,147-1,571 1,274-1,571 1,400-1,800 1,548-1,595 1,285-1,380

SIGNIFICANT PROJECTS UNDER CONSTRUCTION BUILDING Mipec Mulberry Lane Hyundai Hillstate Royal City Mandarin Garden LOCATION Dong Da Ha Dong Ha Dong Thanh Xuan Cau Giay DEVELOPER Mipec Capital Land Hyundai E&C Vincom Hoa Phat EST. NUMBER OF UNITS 314 1,478 928 4,200 1,008 EXPECTED COMPLETION 2012 2013 2013 2013 2013

* RENEWAL - NOT INCLUDED IN LEASING ACTIVITY STATISTICS

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This report contains information available to the public and has been relied upon by Cushman & Wakefield on the basis that it is accurate and complete. Cushman & Wakefield accepts no responsibility if this should prove not to be the case. No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by our principals. ę2012 Cushman & Wakefield, Inc. All rights reserved.