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Savills Viet NamResearch

Viet NamApartment Sector 2017

VIET NAM APARTMENT SECTORTHE GREAT WAVE

Q2 in HCMC there was a 67% YoY increase in sales to 11,600 whilst in Hanoi it was 13 % to 6,800.

In HCMC Grade C accounted for 62% of sales, while in Ha Noi, Grade B dominated with over 42%.

Savills invites you to review the key structural elementsthat shape the apartment market.

Every real estate project is closely monitored by our Research team. For sales to be recorded an agreement (SPA) between developer and purchaser must be made. Transactions are constantly assessed for accuracy and are released at the end of each quarter at our Market Review.

Savills is Vietnams leading residential broker so we benefit from keen market insight. We have operated in Viet Nam for over 20 years. Our people, our methodologies and our integrity are what makes Savills the premier international property agency in the region.

At

First timebuyers are

increasing in share.Is the market

taking abreather?

What is thesustainable level of

demand?

Willsecondary prices

continue toincrease?

2

HANOI

DANANG

HCMC

Over 22 yearsEstablished in Vietnam

since 1995. The 1st International Property

Firm in the Country

68,000 sqm leased in 2016

200 mil US$Total value

of residential sales in 2016.

SAVILLS VIETNAM

Over 5.2 M sqm Under management in 2016 (over 36 buildings in HCMC and over 18 in Hanoi).

Our Research and Consultancy Services are the most innovative in Vietnam

Number one agency in volume of transactions with over USD 100M transacted each year.

Savills Viet Nam | 03

4

75 24.3

Malaysia100 3.4 1

Singapore

Thailand

52 23

Philippines

44 14.4

40 35.9

Laos

Indonesia

54 24.3

Cambodia

21 24.6

35 24.4

Myanmar

34 23.7

Vietnam

Urbanisation ratio(%)(2015)

Household size(person/HH), 2016

Urbanisation rate(%)(Avr. 2012-2016)

How to read it?

Source: CIA World Factbook, 2017

OVERVIEW

THE GREAT WAVE

In a regional context, Viet Nam has a low proportion of urban population but a huge flow of rural migrants, resulting in a high urbanization rate. This factor combined with a large but declining household size, results in robust new dwelling formation.


Dwelling replacement need is high, Approximately 27% of Viet Nams urban population are living in low quality housing.

HCMC and Ha Noi have 58,000 and 42,000 households formed each year.

The emerging paradigm of single living in urban areas.

Annual household formation, 2016

Low quality housing (%), 2015

Single urban households (%)

1989 1994 1999 2004 2009 2014 2019

4.6 4.65 4.7 6.23 8.1 9.1 10.1

HCMC - 58,000 Ha Noi - 42,000

Source: GSO

Source: Savills Research & Consultancy

Source: UN-Habitat, 2015

Number ofpeople (Million)

% of urbanpopulation

139

22%

46

38%

35

25%

31

27%

18

41%

3

55%

3

31%

APARTMENT SEGMENT

INVESTMENT UNIVERSE

THE GREAT WAVE

Apartment demand is sustainable.


0

100,000

200,000

300,000

400,000

2009 2010 2011 2012 2013 2014 2015 2016 1H2017

Nationwide market (HCMC & Ha Noi)

Market size in 2016

Total supply

Take-up

HCMC and Ha Noi are strong regional markets

Ha Noi and HCMC lead regional cities and yield strongly.


Source: Savills Research &Consultancy and Numbeo

Gross rental yield (%, pa)

Favourable investment channel, with limited alternatives.Current yield (%, pa)

12-month savingrates

(2nd-tier bank)

12-month savingrates

(1st-tier bank)

Apartmentrental

7.4% 6.6% 6.5%USD3%

Gold (SJC)-0.8%

VN-Index20%

0

10,000

20,000

30,000

40,000

0

1

2

3

4

HCMC Bangkok Jakarta Hanoi KL Phnompenh Yangon Vientiane

5.8HCMC

4.3Manila

4.0Bangkok

5.2Jakarta

3.7Singapore

4.8KL

Primary sales - LHS

Sales per 1,000 pp - RHS

Hanoi7.4

6


STRONG HOUSING DEMAND

OUTLOOK


Source: Numbeo.com, 2017


Apartment affordability

Hand-overs

Buyer profiles

Recent hand-overs will pressure the rental market.

First-time home buyers and occupiers are increasing in share.

Ha Noi HCMC

0 20 40 60 80 100

Q1

Q2

Q1

Q2

Q3

Q4

9%

11%34%

28%61%11%

23% 23%

19%

8%26%66%

45%36%

54%

29%62%

55%

2016

2017

SpeculationBuy-to-letOccupying

2018

2017

2016

2015

(Times)30

20

10

0

Viet Nam Thailand Cambodia Singapore Indonesia Philippines Malaysia

Price To Annual Income

Big opportunityfor affordable

housing

25% (YoY)in primary supply

107%(YoY)in transactions

Projects(<US$900/m2): 1H/2017

0 10,000 20,000 30,000 40,000010,00020,00030,00040,000

OUR SERVICES

This report is for general informative purposes only. It may not be published, reproduced or quoted in part or in whole, nor may it be used as a basis for any contract, prospectus, agreement or other document without prior consent. Whilst every effort has been made to ensure its accuracy, Savills accepts no liability whatsoever for any direct or consequential loss arising from its use. The content is strictly copyright and reproduction of the whole or part of it in any form is prohibited without written permission from Savills Research.

Troy GriffithsDeputy Managing Director

+84 (0) 933 276 [email protected]

Pham Van DaiHead of Research - HCMC


Do Thu HangHead of Research - Ha Noi


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