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Saigon housing market slows as insiders warn of crash

By Vu Le   May 21, 2017 | 05:00 pm GMT+7
Saigon housing market slows as insiders warn of crash
The property market in Ho Chi Minh City can turn into a buyers' one without cautionary investment, insiders said. Photo by VnExpress/Lucas Nguyen

Sales in the first quarter fell 13 percent from late last year with a 47 percent drop in the apartment sector.

The residential property market in Ho Chi Minh City has slowed this year, prompting warnings of cautionary investment to prevent a market crash.

Real estate consultancy firm Savills said in a new report that sales in the city's residential sector fell 13 percent in the first quarter from a five-year high in the fourth quarter of last year.

Transaction volume in the top tier segment slid 50 percent while the middle-range fell 35 percent. Affordable housing, mostly in outlying areas like districts 6, 8, Tan Phu and Binh Tan bucked the trend by rising 10 percent and accounting for 62 percent of sales.

A recent report from real estate group CBRE also painted a quiet market in the country's largest city of 12 million people.

Figures from the company showed that during the first three months, transaction volume for apartments in the city dropped 47 percent from the previous quarter and 29 percent from the same period last year.

According to CBRE, the housing markets in both Ho Chi Minh City and Hanoi are growing, but without caution, could slow down and turn into buyers’ markets with oversupply and falling prices, like in Phnom Penh and Singapore.

Duong Thuy Dung, director of CBRE Vietnam, said the market in Ho Chi Minh City has shown signs of a slowdown and the question is how long it will be able to maintain a safe distance from crashing.

At the same time, the land segment in the southern city has heated up. A report from local real estate firm DKRA showed that land prices in the city have risen on average 10 percent per month this year.

However, the Ho Chi Minh City Real Estate Association earlier this month said the land fever was fake and had been fueled by speculators. It has asked government agencies to intervene to prevent the bubble from bursting.