The housing market in Da Nang and its neighbouring localities saw a decrease in supply but house prices remained high in the third quarter of 2022, according to latest report from the DKRA Viet Nam Joint Stock Company. DKRA forcast that home prices tend to increase by the end of the year due to the pressure of input costs, inflation, soaring interest rates and other factors.

For 2022, the supply of residential plots in Da Nang will continue to grow in the southern part of the city. Photo: NAM PHUONG

Quite fall housing market

According to DRKA, the third quarter of 2022 saw an increase in supply in the serviced apartments segment, but the figure was lower than the same period before 2019. However, the local real estate market witnessed scarce supply of resort property. A combined total of 348 serviced apartments from 2 real estate projects went on sale.

The housing consumption rates hit 81% while the demand did not significantly increase. Increases in demand were mainly reported in Da Nang and Quang Nam Province. The selling prices of serviced apartments continued to increase with a 5-8% rise from the second quarter of 2022 due to the pressure of input costs, inflation, soaring interest rates, and other factors. On average, housing market prices stood at VND 89 million per square metre, and VND 65 million per square meter in Quang Nam Province.

There was no new supply in the resort villa segment in the third quarter of 2022 but most of the supply from housing inventory that has opened for sale in previous years. Challenges in credit control and macro-economic difficulties caused the consumption to decrease sharply, and real estate liquidity to slow down. The sales of housing projects were slow and even no transactions were reported in some projects. The average selling prices of resort villas stood at VND 40 billion per unit in Da Nang, and VND 31.5 billion per unit in Quang Nam Province. Two consecutive quarters of 2022 have witnessed no new supply in the townhouse and shophouse segment. Therefore, this segment has fallen quite due to scarce supply.

For the residential plots segment, around 13 plotting projects with 998 plots in total went on sale in the third quarter of 2022, down 17.2% from the previous quarter. The consumption rates reached highest level so far this year with 59%, up 92.1% quarter-over-quarter. New supply was mainly reported in the vicinity of Da Nang that borders with Quang Nam Province with 59% of the total supply while that in Da Nang contributed 49%.

The selling prices of land plots did not change much compared with the previous quarter, and a decrease of 3-6% was observed in the selling prices of some plotting projects. The selling prices of residential plots were VND 41.1 million per square metre in Da Nang, and VND 27.8 million per square metre in Quang Nam Province. The secondary market in real estate also fell quite with a decrease of 3-5% from the previous quarter.

Scarce supply, high selling prices

For the apartment segment in Da Nang, 3 projects with about 91 apartments went on sales in the third quarter of 2022. The consumption rates only reached 47%, down 60.6% from the previous quarter. Ngu Hanh Son District took the lead in Da Nang in new supply in the third quarter with 63.7% of the city’s total apartment supply and 76.7% of the city’s consumption rates. Grade A apartments hold a leading position, accounting for 89% of the city’s total supply and 66% of the city’s consumption rates. The average selling prices of apartments increased by 10-16% from the beginning of the year.

The average selling prices of budget apartments in Ngu Hanh Son District stood at VND 43.1 million per square metre, VND 72.8 million per square metre in Lien Chieu District. 7 projects with 374 units in total went on sales in the third quarter of 2022 in the townhouse and villa segment, down 36.8% quarter over quarter . New supply were mainly reported in Da Nang, contributing 48.1% of total new supply, followed by Quang Nam Province with 33.7%. The demand fell sharply, consumption rates over new supply reached only about 47%, down 62.7% quarter over quarter.

According to DKRA forecasts, the new supply in the residential plots segment in the remaining 3 months of the year is expected to range from 700-800 plots, mainly in Da Nang and Quang Nam Province. The selling prices are forecast to increase slightly in some legally completed projects. The liquidity of the secondary real estate market will likely to continue to remain at an average level while the selling prices will not change much compared to the third quarter of 2022.

The new supply in the apartment segment in the final quater is expected to range from 150-200 units , mainly in Da Nang while that in in the townhouse and villa segment will likely to remain at the same level as the previous quarter, with 350-450 units in total supply. The selling prices of apartments are predicted to increase slightly compared to the third quater. The secondary real estate market may remain at a stable level under the pressure of soaring interest rates while a drop in selling prices will be observed in this market. Scarce supply in resort villas are in forecast for Da Nang and its neighbours with about 100 units in total supply.

Reporting by TRIEU TUNG – Translating by H.L