Market sectors such as office, residential, serviced apartment and hotel in Hanoi have seen first down cycle, Marc Townsend, managing director of CB Richard Ellis (Vietnam) Co., Ltd, said at a press briefing about the firm's latest survey in the city.
The downward trend was believed to be a result of the lingering global economic slowdown, the country's inflationary environment, and market illiquidity fueled by high interest rates.
The office sector saw relatively little new space in the second quarter of this year, prices of accommodation in central locations dropped slightly in the second quarter against the previous quarter, while those in remote locations or of projects in the initial development stage declined some 15 percent. Construction delays resulting from increased prices of materials and labor as well as more difficult financing conditions are two of contributing factors.
Demand for hotels unchanged in the second quarter of this year, as the occupancy rate stood at 70 percent, the same rate in the first quarter, Townsend said, adding that the average daily room rate for five-star hotels was 158 U.S. dollars in the second quarter. The occupancy rate is expected to rise in the fourth quarter, a traditionally high season for tourism and business travel.
Although the most popular serviced apartment projects in prime areas are still running at occupancy of 95-100 percent, the demand for serviced apartments, mainly coming from expatriates in Vietnam, has been slowered than anticipated.
"This could be because companies have become more price-sentitive with the global economic downturn," he said.
The long-term outlook for the serviced apartment market in Hanoi is positive as the number of expatriates working in the city is expected to steadily increase in the future.
The real estate market in Hanoi in particular and in major cities in Vietnam in general is expected to become rosy in the coming months because the country's macroeconomic policies are showing signs of effectiveness.
The Vietnamese government has made progress in curbing inflation, he said, noting that the month-on-month inflation rate stood at 2.14 percent in June, compared with 3.19 percent in May.
Foreign direct investment in Vietnam, estimated at 31 billion U.S. dollars in the first half of this year, is forecast to exceed 40 billion dollars in the year. A large part of the FDI is earmarked for realty development, he said.
