HCMC’s Metro Line puts residential property on fast track

HO CHI MINH CITY (May 4): The city’s first Metro Line is expected to boost the prices of land within a 10-minute walk from its stations by as much as 20% more than other areas when it is operational in 2020.

“With the first Metro Line in HCMC making good construction progress and set to open in 2020, all of us who live and work in the city are gearing up for some big and exciting changes,” said CB Richard Ellis (CBRE) Vietnam Co Ltd managing director Marc Townsend in a statement.

“For those of us in real estate, the game will be changing even more dramatically.”

Ellis noted that properties located near the metro line areas, including Binh Thanh District, District 2, District 9 and Thu Duc District are currently selling at 2% to 5% premiums over similar properties away from the planned stations.

According to the CBRE report “Ho Chi Minh City Metro Line: changing the face of the property market,” the average price of high-end condominiums in District 2 increased by 11% from US$1,490 (RM5,305) per square metre (including maintenance and value-added tax) in 2012 to US$1,650 as at April this year. The number of sold units in District 2 increased from 329 in 2012 to 3,710 last year.

In view of new launches, the number of condominium units near the planned stations has surged in the last three years. The average supply in District 2 grew 36%, followed by 24% in District 4 and 10% in District 7. CBRE forecasts incoming condominium supply to rise by 58% in District 2 and 200% in District 9 in 2017.

The Metro Line is expected to draw a 186,000 daily ridership when it becomes operational.

“Better connectivity will allow commercial activities to be decentralised away from the congested central business district (CBD),” said CBRE Vietnam head of research and consulting department Duong Thuy Dung.

“This will also allow occupancy costs for the city to be controlled and managed by being able to offer alternative locations away from the CBD yet still be well connected.”

Duong also expects new clusters of commercial properties to be developed along the metro lines, especially mid-end properties.

“For [foreign] property investors, anywhere outside a catchment of half-an-hour’s drive from the city centre doesn’t really come into play as a serious investment opportunity,” said Duong. She estimates the Metro Line will cut commuting times by at least half when it becomes operational in 2020.