HCMCity (VNA) – The purchasing power of apartments in Ho Chi Minh Cityhas decreased significantly and yet, the demand for land for residentialpurposes is still recording positive signals.

Since April 2018, the city’s apartment market has recorded few new projects forsale. The situation is attributed to the tightening of loan credit by banks forthe real estate sector.

Anothercause is that municipal authorities are preparing to issue a housingdevelopment plan up to 2020, with some adjustments – a factor which will affectthe apartment development strategies for many enterprises.

According to Duong Thuy Dung, Senior Directorand head of Research and Consulting at CBRE Vietnam, the number of newapartments offered in HCM City in the third quarter reached 6,700 units, down14 percent over the same period in 2017.

Inthe first nine months of this year, more than 22,000 apartments were offered forsale, down 1 percent year-on-year.

Le Hoang Chau, President of the HCM City Real Estate Association (HoREA), stated that in the first twoquarters of 2018, the national real estate market showed signs of decline, bothin supply and in the total number of transactions.

Particularly, in HCM City, the overall supply of housing projects fell by 44.5percent, of which the high-end, middle-range, and popular segments reported respectivedecreases of 25.9 percent, 32.6 percent, and 69.7 percent. The number of mergers and acquisitions (M&A) deals also declined,with only 6 out of 15 projects eligible for approval.

HoREA predicts that the middle-range segment is likely to grow strongly,holding a key role in the city’s real estate market for the remaining months ofthe year.

Su Ngoc Khuong, Investment Director of Savills Vietnam, said the scale of the apartmentmarket in HCM City is still quite stable and will continue to grow in the timeto come.

It is forecast that in the next three years, the segment of grade-C apartments willoccupy 60 percent of the future supply. –VNA