Which segment of Hai Phong real estate is "on the rise" as land values decline?

DNHN - Land prices in Hai Phong fell by 15 to 30 per cent, but flat and industrial real estate "took the throne."

Land in Hai Phong decreased sharply

From the fourth quarter of 2020 to the second quarter of 2022, the land segment in Hai Phong grew rapidly before beginning to decline.

According to the Vietnam Association of Real Estate Brokers (VARs), land prices in Hai Phong decreased by 15 to 30 per cent from the first quarter of 2022 to the first quarter of 2023, compared to the peak period. During the second quarter of 2023, some previously infected virtual regions continued to reduce by an additional 5-10% to seek liquidity.

Currently, land prices in the central area and small alleys range from 18 to 40 million VND per square metre, while land plots with wider roads and car access cost between 40 and 100 million VND per square metre.

Close to the city's core, land costs range from 12 to 40 million VND per square metre. Meanwhile, land prices in the suburbs are typically between 3 and 5 million VND per square metre, well below the national average of 12 million.

In the last two months, there have been several land transactions in Hong Bang, Le Chan, and areas close to the central core, including An Duong, Thuy Nguyen, Hai An, and Duong Kinh. In suburban areas, however, such as An Lao, Tien Lang, and Vinh Bao, there are still very few transactions, and the land market is still extremely quiet.

Investors continue to participate in land auctions in Thuy Nguyen, An Duong, though the absorption rate is modest at 40 to 60 per cent.

Similarly, the low-rise segment of the real estate market is experiencing stability in both supply and liquidity. In the first six months of 2023, no low-rise projects are for sale.

In July and August of 2023, three projects will be available for purchase: Hai An Centre, Royal River City, and HP Elite Central Hai Phong.

The rate of absorption for these projects is very low. The urban area of H2H Vietnam Investment Joint Stock Company's Hai An Centre port industrial logistics service and trade centre, with 370 units and an average selling price of 40 million VND per square metre, has an absorption rate of only 10%.

Alternatively, similar to the Royal River City project of Newland Construction Investment Joint Stock Company, with 124 units and a selling price of 9 billion VND per unit, it has an absorption rate of approximately 40%.

Regarding prices, low-rise housing in Hai Phong experienced a slight decline. In the first quarter of 2023, prices for projects such as Vinhomes Imperia, Vinhomes Marina, Hoang Huy Mall, Overseas Vietnamese Village, and Hoang Huy Riverside decreased by only 5-15% on average compared to their peaks. Five to ten per cent price decreases are negligible in the segment of street-front homes.

Apartments and industrial real estate "take the throne"

While land and houses on land in Hai Phong remain tranquil, apartment buildings and industrial real estate are experiencing a resurgence of activity.

Specifically, apartment projects in Hai Phong are still being constructed and delivered to customers by the agreed-upon schedule. Many high-end apartment complexes have a very high absorption rate, ranging from 60 to 100 per cent, despite their high prices.

For instance, the Diamond Crown Plaza project by DoJi Group, which consists of 1,100 apartments priced at approximately 60 million VND/m2, has a liquidity of 98%. Agape Vietnam Co., Ltd.'s Sentosa Sky Park, which went on sale in March 2023, has a 61% absorption rate.

Hoang Huy Commerce has a scale of 2,500 apartments, with selling prices between 34 and 42 million VND per square metre and a liquidity of nearly 74%. The Minato Residence of Minato Vietnam Co., Ltd. opened for sale in June 2023, with nearly 60% liquidity.

In addition to luxury apartments, the market is very interested in social housing, especially for low-income individuals. Between 2021 and 2025, it is anticipated that 605,770 square metres of social housing floors and 10,140 apartments will be completed in Hai Phong.

In 2023, construction began on social housing projects such as the Quang Vinh Luong Khanh Thien project of Hai Phong Waggon Joint Stock Company with more than 200 units; the EverGreen Trang Due project with more than 2,500 social housing units of Saigon - Hai Phong Industrial Park Joint Stock Company; and the Project 384 Le Thanh Tong Moonbay Residence of Binh Phat Chemical and Electrical Materials Company with 1,300 apartments.

In addition to apartments, industrial real estate in Hai Phong is a bright spot. In addition to the 5,000 hectares of 12 industrial parks in which Hai Phong is currently investing, the city will deploy 15 additional industrial parks with a total area of 6,200 hectares shortly to attract an additional 12-15 billion US dollars.

Hai Phong directs industrial parks and economic zone development in the direction of ecological industry. Currently, there are two eco-industrial parks in Hai Phong: Nam Cau Kien (236 ha) and DEEP C (540 ha).

Currently, industrial parks in Hai Phong are over 90% occupied with an average rental price of USD 100 per square metre per rental period. This is an expensive price in the North, exceeding those of Hung Yen, Bac Ninh, and Hai Duong.

Nam Cau Kien, Deep C, Nam Dinh Vu, Trang Due, and VSIP are examples of industrial parks with high rents in Hai Phong that all have convenient logistics locations, good ecological infrastructure, and many synchronous amenities to serve investors.

Industrial parks such as Trang Due, VSIP Hai Phong, and Do Son are completely occupied. Other projects, including Nam Cau Kien and DeepC, have occupancy rates greater than 80 per cent.

In addition, the ready-built factory rental segment is thriving, the demand for many supplies is limited or does not meet the lessee's requirements, and the factory rental price in VSIP is between 4.8 and 6 USD per square metre per month. Outside of VSIP, rent is between 45,000 and 70,000 VND per square metre per month.

Explaining the reason why industrial estate and apartment real estate are two vibrant segments, Mr To Hung, General Director of RecBook, said that Hai Phong possesses a lot of potential in terms of geographical location and infrastructure. To develop industry and attract foreign investment, traffic, economic, and social factors are crucial.

Mr Hung stated, at the conference "Hai Phong Real Estate: Bright Spots in Each Segment" organised by the Vietnam Association of Real Estate Brokers (VARs), Hai Phong Real Estate Association (HPREA), Investment Consulting and Promotion Centre VARs in coordination with Recbook, that Hai Phong's economic growth rate is estimated to be 12.32%, which is approximately 1.5 times the national average and places it among the country's leading economic growth regions. international.

Promoting administrative reform, enhancing the business investment environment and policies accompanying businesses and investors, and placing an emphasis on businesses have all contributed to the city's increased competitiveness. compete for investment.

FDI attraction in Hai Phong increased significantly, especially in industrial parks. In 2023, Hai Phong intends to attract 2 to 2.5 billion USD in foreign investment capital. The city has attracted over $1.8 billion as of June 23, 2023, an increase of 164.8% compared to the same period in 2022.

According to Mr Hung, this is the factor responsible for the robust development of industrial real estate in Hai Phong. In industrial parks, the robust growth of industry contributes to the growth potential of the housing segment, particularly apartments, which serve the real needs of people, workers, and foreign experts. strong.

Moreover, in the context of a calm market, apartment project investors have implemented several flexible sales policies that are market-appropriate, as well as several advantageous policies that encourage customers to purchase apartments. domestic responsibilities.

In contrast, land is primarily geared towards real estate investors and speculators. Consequently, this segment has been unable to recover in the current challenging market environment.

Or, the segment of low-rise housing has a high selling price, so its recovery will be slower than that of apartment buildings that meet the real demand for renting and purchasing housing. at a more affordable cost.

Nghe Nhan