Housing prices keep rising in Ho Chi Minh City, Vietnam’s financial hub, because of a supply shortage, growing population and lack of transport infrastructure in suburban areas, according to an Oct 26 report by CBRE Group’s Vietnamese unit. Prices are up between 5% and 10% from six months ago, the data showed.
That has created a hot market for developers. SonKim Land competes with firms including Vinhomes and Nam Long Investment Corp, which are traded on the stock market and are up more than 20% this year. Vinhomes accounts for almost 10% of the benchmark VN Index and helped it reach a one-year high in the last week of October as it surged after announcing a share buyback plan. Its parent, Vingroup, has the biggest weighting on the gauge.
In August, SonKim Land raised US$121 million from an investor consortium led by EXS Capital, ACA Investments and Credit Suisse Group, it said on its website. That followed successful initial investment rounds of US$37 million in 2013 and US$46 million in 2016.
SonKim Land builds luxury properties mostly in Ho Chi Minh City, such as Serenity Sky Villas, which has apartments with private swimming pools. It is developing a US$2 billion city centre project called The Metropole Thu Thiem. The company also aims to have projects across Vietnam, including luxury residential, commercial and hospitality properties, its CEO says.
Vietnam’s expanding middle class, underpinned by rapid economic growth, is giving the nation’s consumers more disposable income to buy houses. The average cost of a home in Ho Chi Minh City is now US$103,057 — and US$403,270 for a luxury property, CBRE Group said in a report earlier this year.
“Vietnam is benefiting most from the [US-China] trade war by attracting a lot of factories and FDIs from outside — all this is creating a lot of demand for housing,” Han said, referring to foreign direct investment. “It seems like the market will continue to have very little supply going forward.”
And yet, while the country’s benchmark VN Index has risen 15% this year — the most in Southeast Asia — share sales have been suffering amid trade tension. Some 35 companies have sold stock in Vietnam since January, raising US$330 million, compared with 61 sales for almost US$5 billion in the same period last year, data compiled by Bloomberg show.
