Saigon’s apartment sales in November are the lowest in 18 months

According to property services provider Savills Vietnam, the third quarter of 2018 saw apartment liquidity in Ho Chi Minh City fall to it’s lowest level in six consecutive quarters and only 10,000 apartments were traded in Saigon in the third quarter of 2018. Overall apartment sales were down 30% from last quarter and down 13% year-on-year.

Savills forecasts that there will be more than 124,000 apartments offered for sale by 2020. Districts 2 and 9 in the eastern part of the city will have more than 68,000 units available and will account for 55% of this total.

CBRE Vietnam has also published a recent report on sales for the 3rd quarter and reports even lower sales than Savills, and says that only 6,568 apartments were sold in the 3Q. According to CBRE, sales fell 7% from the previous quarter and were down 16% over the same period in 2017.

There are large disparities between the real estate reports that are issued by CBRE and Savills and this is attributed to differences in their statistical methodology. Recently, the Ho Chi Minh City Real Estate Association (HoREA) released their own report on the housing market and says that there has been a continuous downwards momentum in apartment supply from the beginning of the year.

According to the HoREA report, during the 3rd quarter, total housing supply in the Saigon market fell 39.2%. The supply of high-end luxury apartments fell 9.6%, and that of midrange apartments by 37.5%. But the biggest decrease in supply was in the low-priced apartment segment, which was down 68%.

HoREA warned that the structure of real estate supply showed a serious imbalance in the market, with low priced apartments taking up only 19.3% of total supply while luxury apartments take up over 30%. HoREA contends that these statistics highlight a mismatch between supply and demand and that this imbalance poses both a short-term and long-term risk to sustainable development and social welfare.