Market Report | Q1 2023

Because of the impact of legal policies, rising interest rates, demand exceeding supply, and the market being illiquid in 2022, the real estate market was difficult. A number of large and small real estate enterprises have paused their investment activities, halted or delayed the implementation of new projects. Furthermore, these companies have been looking for ways to restructure their capital, given that banks continue to tighten credit room for real estate purposes. The real estate market was still bleak in the first quarter of 2023, with signs of recovery proving difficult. Because the project’s legal bottleneck had not been removed, interest rates were high (around 12-14% per year), and demand continued to outstrip supply, putting pressure on both supply and demand.

Apartment: the apartment market in three provinces: Ho Chi Minh City, Hanoi, and Danang decreased slightly compared to the previous quarter, by about 1-5% QoQ. The average asking price of apartments in Ho Chi Minh City ranged from 630 to 17,000 USD/sqm, a 3.8% decrease YoY. The asking price in Hanoi was 840-8,800 USD/sqm, up 4.9% YoY, and Da Nang was 940 4,300 USD/sqm, up 3.5% YoY

Office: In Q1/2023, the rental rate of offices in Ho Chi Minh City, Hanoi, and Da Nang increased about 3-4% YoY. Typically, in Ho Chi Minh City, the average rental rate ranged from 17-65 USD/sqm/month, up about 4% YoY, and the occupancy rate was more than 88%. Hanoi had rental rates ranging from 12-43 USD/sqm/month, up about 3-3.5% YoY, and an occupancy rate of more than 80%.

Retail: In Ho Chi Minh City market, the average rent in the CBD area was up 10% YoY and about 17% YoY in the non – CBD. The average rent in the CBD area increased by 9% YoY and the non-CBD area up 14% YoY.

Hotel: Hotel rents in some provinces increased slightly by about 1-6% QoQ and increased by 2-10% YoY. Typically, in Ho Chi Minh City, the average hotel rent reached over 90 USD/room/night, up about 10% YoY and the occupancy rate reached more than 60%. In Hanoi, the average rent reached nearly 80 USD/room/ night, up about 3.8% YoY and the occupancy rate reached more than 55%.

Industrial: The average land leasing price in the Southern region continued to lead the market, averaging about 160 USD/sqm/lease term, up more than 14% YoY. Land rental prices in the Northern region reached an average of nearly 140 USD/sqm/lease term, up about 12% YoY. In the Central region, the average rent was about 75 USD/sqm/lease term, with occupancy rates higher than 70%.