The latest report from Housing and Real Estate Market Management Agency (under Ministry of Construction) showed that the number of housing transactions in May continued to rise, mainly at medium and high-class projects. Due to the limited supply, sales volume at affordable segment still remained low.

Specifically, in May, the number of successful transactions in Hanoi market increased by 14%, reaching about 1,200 transactions. Meanwhile, Ho Chi Minh City market saw 1,300 successful transactions. In the first five months of this year, total sales volume in Hanoi was about 5,400 transactions. In HCMC, it was 5,870 transactions, up 12% over April.

Nearly 15,000 apartments sold

In HCMC, most of sold apartments are located near the city center, with convenient transportation, flexible design, various utilities, potential for price increase in future and reasonable payment progress such as Ha Do Centrosa Garden project (District 10), Vinhomes Golden River Ba Son (District 1).

In addition, sales volume of low-rise housing in District 2 and District 9, such as projects Thu Thiem Garden, Lucasta Khang Dien, also went up.

Meanwhile, in Hanoi, most of projects recording large transaction volumes locate in the Southwestern districts: Hoang Mai, Thanh Xuan, Ha Dong. Some of the projects with huge sales volumes in the month include Gelexia Riverside (Hoang Mai), The Golden Palm (Thanh Xuan), Gemek Premium (Ha Dong).

Increasing sales volume helps reduce inventory. Total value of real estate inventory as of 20 May 2017 reaches about VND27.894 trillion, down VND474 billion over last month and decreased VND3.129 trillion (equivalent to 10.09%) compared to December 2016.

In particular, inventory of low-rise buildings: 3,492 units (VND7.379 trillion); apartment inventory: 3,325 units (equivalent to VND4.832 trillion); commercial land: 648,139m2 (VND2.48 trillion VND) and residential land: 3,375,871m2 (VND13.203 trillion VND).

Land prices in HCMC surge

Generally, apartment prices in May and the first months of 2017 have not changed much. In the two major cities, prices at medium and high-end projects located in central area, with synchronous infrastructure, favorable location, prestigious investors, good construction progress, attractive sales and promotion policies,…rose slightly by 3-5% compared to the same period of 2015. At some projects, prices even increased by10%.

However, land segment in HCMC has experienced a “fever” in demand and sudden price increase. Since the beginning of the year, land prices in Binh Chanh, Can Gio, Hoc Mon, Cu Chi, District 2 and District 9 have soared by 10-40%, even up to 70% compared to 2016.

HCMC’s Real Estate Association said that the strong development of transportation infrastructure in these districts is the main reason for land price increase. A number of major transport projects under construction such as Cat Lai Bridge, Phuoc Khanh Bridge, Ben Thanh – Suoi Tien Metro Line have pushed land price up in the South, East and West of the city.

The Housing and Real Estate Market Management Agency said the land “fever” has bad impact on the local real estate market, causing many risks and it need correcting as soon as possible.