SG Property sentiment up in Vietnam
Property Here - Wednesday, April 17, 2013
By Shabnam Muzammil:
Vietnam’s property market has shown signs of optimism in the first quarter of 2013 as its state bank continues monetary easing efforts, noted CBRE.
Moreover, property stocks performed better as an investment option in Q1, with the Ho Chi Minh City Stock Exchange ending 12.5 percent higher than last year.
“Lowering interest rates and an improving stock market gives the real estate market hope, especially residential developers who have faced the brunt of the negative sentiment which has prevailed within the market. In past cycles we have noted how profit taking from the stock market and the availability of financing are key to driving residential sales. Whilst sentiment does remain icy, there is light at the end of the tunnel,” said Marc Townsend, Managing Director of CBRE Vietnam.
However, there is still a need for macroeconomic policy to stimulate economic growth without impacting inflation, the consultancy said.
The office sector saw a number of major transactions, while rents across the Grade A and B segments either remained flat or rose moderately. Grade A rental rates increased 1.0 percent to US$31.36 (S$38.83) psm as of end-Q1 while vacancy rates declined 13.1 percent. Meanwhile, Grade B rents moved up by 3.5 percent to US$18.11 (S$22.43) psm.
“As predicted in the previous quarter, office rentals have temporarily reached a bottom. We now expect no new Grade A and Grade B supply to be completed until at least the first quarter of 2014, thus there is little reason to suggest any softening in rents and reason to believe some landlords positions may strengthen,” said Dung Duong, Senior Manager of Research and Consulting for CBRE Vietnam.
Shabnam Muzammil, Senior Journalist at PropertyGuru, wrote this story. To contact her about this or other stories email firstname.lastname@example.org