Vietnam Insight
Monday, 25/08/2014, 12:57

Da Nang housing construction falls in H1


Production volume for the property market here fell slightly by 1 per cent in the first half of 2014, a property consultancy company report showed.

The report revealed that the first half witnessed the construction of 20 buildings on a total land area of 68,300 square meters. During the same period last year, two small buildings were converted for private use and removed from the market.

Downtown Hai Chau District continued to be the main supplier, with 17 projects covering an estimated total land area of 55,700 square metres, or 81 per cent of total market share. Thanh Khe District chipped in the remaining 19 per cent with three projects covering a total land area of 12,600 square metres.

Occupancy decreased by one percentage point from 87 per cent to 86 per cent while the average monthly rent fell by 4 per cent to VND218,000 (US$10.4) per square metre.

According to the report, Grade A occupancy made up 94 per cent, increasing slightly by 1 percentage point, while Grade B made up 86 per cent. Grade C made up 84 per cent, decreasing slighty by a percentage point.

All grades saw a decrease in average monthly rent per square meter, with Grade A registering VND358,000 ($17.04) or 6 per cent lower than the same period last year and Grade B, VND243,000 ($11.57) or 5 per cent lower and Grade C, VND162,000 ($7.7) or 2 per cent lower.

The report also showed that market demand for leased land in the first half fell by 2 per cent, with a total of 58,700 square metres. The demand for offices came mainly from Hai Chau District, with 82 per cent.

Accumulated foreign direct investment (FDI) from Asian countries accounted for approximately 50 per cent of the total FDI in the property market here.

According to Viet Nam's Chamber of Commerce and Industry (VCCI), Da Nang was ranked first in the Provincial Competitiveness Index (PCI) and was one of the most attractive investment locations in Viet Nam for 2013.

Two new projects on an estimated 31,000-square metre land area are expected to add to the city's office market by 2015.

Total future office supply for the second half of this year is expected to come from 16 projects covering a total land area of 104,000 square metres. But a delay is expected in the construction schedule of a number of these projects.

No significant development was seen in the residential sector, since no villa and apartment projects were introduced this year.

The number of villas remained the same as that of 2012, with 927 dwellings from 16 projects. In 2013, the primary market witnessed a 2 per cent drop in villas, with 404 dwellings from 11 projects, while the secondary market witnessed a 2 per cent rise, with 523 dwellings from 16 projects.

Exactly 2,400 apartment units from 13 projects were built. The primary market witnessed the construction of 869 units from 12 projects, an 8 per cent fall from that of the same period last year. The secondary market witnessed the construction of 1,555 units from 13 projects, a 3 per cent rise from that of the same period last year.

Low market sentiment among buyers led to a fall in the number of villas sold, at 5 per cent or 4 per centage points lower than that of the same period last year.

The average villa price was VND23.1 million ($1,100) per square meter, or 8 per cent less than that of the same period last year, as a result of a temporary stay on sales in high-budget projects early this year.

In contrast, the apartment market showed positive movement, with a 9 per cent absorption rate in the first half of this year, a 4 per centage point increase over that of the same period last year resulting from transactions in affordable projects worth VND23.1 to VND27.3 million ($1,300) per square metre. The average price was approximately VND26.1million ($1,242) per square metre.

A survey showed that the key factors that may affect buying decisions include the reputation of the developer, construction status, price and location.

An estimated 1,300 dwellings from 12 villa projects and 13,400 units from 12 apartment projects are expected to be built for the city's property market in the second half of this year. The districts of Peninsula Son Tra and Hai Chau are expected to have the largest number of future villas and apartments.

Total retail stock in the first half of the year was approximately 129,000 square meters, a 5 per cent fall compared with that of the same period last year due to the closure of Dragon Vinh Trung Shopping Centre in Thanh Khe District. The shopping centre is to undergo upgrade.

Modern retail centres exist in only three districts: Hai Chau with 39 per cent, Thanh Khe with 36 per cent and Cam Le with 25 per cent.

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