The real estate market in 2013 as seen by foreign consultancy firms

DDDN – Foreign consultancy firms all believe that the real estate market would still be very difficult in 2013, while the prices would continue decreasing. However, they believe that there would be more successful transactions.

CBRE Vietnam believes that 2013 would be the time for a “revolution” in the real estate market. About the prices of the apartments in Hanoi, CBRE’s experts think that the prices would drop by another 10 percent after decreasing by 12 percent in 2012.

A report showed that Vietnam had 55,000 operational enterprises in the real estate sector in 2012. Of the enterprises, 17,000 took loss, while 2,637 got dissolved. Meanwhile, CBRE thinks that the number of real estate developers and the number of real estate investment funds would be halved in 2013 and then halved further in 2014 before bouncing back again later.

Also according to the real estate consultant, the biggest transactions in the office leasing market would take place in the B-class office market segment. The actual area of offices to be leased in 2013 is believed to increase slightly in 2012 because of the recovery of the Vietnam’s and the world’s economies.

Knight Frank also thinks that the real estate market would still keep gloomy in 2013 with the apartment sale prices to drop further in the first half of the year, if the government does not implement necessary measures to settle the problems of the market.

Most of the transactions would be seen in the low-cost or popular market segments – the segments which both the people with real demand for accommodations and investors are interested in.

With a series of shopping malls to be opened in the next two years, including Vincom Mega Mall, Trang Tien Plaza, Ciputra, Golden Palace and Lotte Center, this is expected to change the face of the Hanoi’s retail market, thus creating a strong competition among retail center developers.

The office market is believed to be stable in the first quarter of 2013 with few transactions to be made by domestic and foreign companies because of the long Tet holiday.

Savills Vietnam, while putting high hope on the measures taken by the government to stimulate the demand, believes that the measures would only show their effects by mid 2013. 

Therefore, one should not expect too much on the recovery of the real estate market in 2013. If the apartment prices decrease further, the sales of low cost products, priced at less than 1-2 billion dong, would increase by 25 percent.

It is estimated that by 2015, about 860,000 square meters of office area would be available on the market to be sourced from 62 new office projects.

Meanwhile, Cushman & Wakefield believes that the measures suggested by the government and relevant ministries are not powerful enough to give strength to the real estate market which is in big difficulties.

It is expected that the new supplies would be available on the Hanoi market from 17 new projects. Since the supply far outstrips the demand, the price downward would continue in 2013, while the market would be the buyers’.

Colliers International does not put high hopes on the market growth in 2013, but it thinks the recovery can be seen in some market segments. The market would give the opportunities to the financially powerful investors who can take full advantage of the current price decreases to develop projects for profit later.

DDDN