The relationship between the development of the Metro system (MRT) and the increase in real estate prices around the Metro area
.In any city in the world, the price of real estate near the metro is also higher than in other areas when people like to enjoy the convenience of this type of modern transportation.
Metro is one of the important drivers of the real estate market
The metro system has long been known as a stimulating factor for the urban development of any city in the world. Just like big cities with metro systems built more than 100 years ago like London and New York, real estate prices near metro in Asian cities and Ho Chi Minh City are increasing rapidly.
When the metro system in Dallas County, Texas, USA was put into operation in 2002, the housing supply near this metro line grew 18.7% in just 10 years. While in more remote locations, this number only increased by 4% and 10%.
In Austria, the supply of apartments in districts near the S-Bahn metro system increased by 18.7% in 10 years. In locations farther from the metro, house prices increased by only 4%. According to CBRE, in just 10 years from 1985 to 1995, 25% of the number of offices, 13% of the number of commercial areas and 25% of the number of residential projects sprang up along the Nantes Tramway railway system. at France.
After the metro system in the Americas and Europe was formed, big cities in Asia such as Tokyo, Hong Kong, Singapore, Bangkok, Manila also started to build metro, opening a new potential door for the market. real estate in these cities.
In Singapore, houses near metro stations or lines are always 15-20% more expensive than other neighborhoods and increase in price by about 20% within 3-5 years.
Metro system in Singapore
In Taipei (Taiwan), transportation convenience is an important factor affecting whether real estate is vibrant or not, to meet the travel and living needs of people, in the Greater Taipei area. under the Shoushan district has gradually formed the Taipei Urban Rapid Transit System through the development and expansion of the MRT system.
The number of real estate in the MRT has also increased significantly. In addition, the government adopts the method of joint construction with the private, the three parties including the landowner, the construction company and the Taipei City Government to cooperate and share benefits, which also affects the supply, demand and real estate prices in the metro.
Most of the increase in real estate prices around the MRT area in Taipei is in the period before and after the opening of the MRT line, that is, after the MRT line is opened in turn, the house prices near the MRT station will also increase. and the expansion of MRT has created a huge increase in property prices. However, with the development of the MRT system and the gradual integration of the network, the increase in MRT real estate prices also changes.
Housing projects located near the metro system often have higher rental and selling prices than other projects thanks to the value of convenience..According to CBRE research, in Asian markets, house prices near public transport systems are often 6-25% higher than the average..
METRO LINE NO.1 (BEN THANH - SUOI TIEN ) IS A BUTTON FOR EAST CHARGES IN Ho Chi Minh City
Ho Chi Minh City, with the largest population in the country, is increasingly facing many problems of the already inadequate, weak and overloaded infrastructure system. Therefore, the Metro system is an opportunity for infrastructure development, as well as restructuring for this urban area.
Currently, construction of Metro line 1 (Ben Thanh - Suoi Tien) has reached nearly 90% of the volume and the city aims to put it into operation in 2022, but since 2015 there have been about 30 real estate projects open for sale. and follow this route.
According to CBRE Vietnam's Thematic Report released in 2020, the expansion to the East of Ho Chi Minh City (HCMC) and the formation of "Eastern City / Thu Duc City" will promote push the regional real estate market to develop strongly, and bring many great opportunities for investors, secondary investors, who have real demand in the coming years.
Possessing a strategic location in the "Golden Triangle" between Ho Chi Minh City, Binh Duong Province and Dong Nai, Eastern City / Thu Duc City will play a key role in connecting Ho Chi Minh City with neighboring provinces. access to traffic and commercial activities.
CBRE emphasizes the role of key infrastructure projects under construction, facilitating favorable connections between the Eastern City and other areas in HCMC. Prominent works can be mentioned as Metro line 1 with a total length of 19.7 km, starting from Ben Thanh station in District 1 to the last station - Depot Long Binh - in District 9 which is expected to be completed by the end of the year. 2021, and Thu Thiem 2 bridge project..
Since Metro Line 1 started construction in 2012, many apartment and commercial center projects have been formed along this train line, especially on the Hanoi Highway in Thao Dien ward. , Binh An and An Phu in District 2. Thu Thiem is also one of the focus areas in the Eastern City with an area of up to 657 hectares.
In the period 2015 - 2020, the selling price of luxury apartments on the primary market in District 2 increased by an average of 7.3% per year, exceeding the average growth rate of the whole market. However, the apartment market in this area still has a lot of potential for price increases in the future.
STILL PRICE OF APARTMENTS NEAR THE METRO LINE NO.1 (BEN THANH - SUOI TIEN ) WHAT ARE WHAT ?
The apartment market in the area along Metro Line 1 still has a lot of potential for price increases in the future. Since 2018, CBRE has found that prices on the secondary market have increased significantly as the metro line is gradually being completed, with resale prices 25% - 75% higher than the original starting price.
According to CBRE, in the period of 2020 - 2025, the supply of new offers in the Eastern City will be quite abundant, with an average annual growth rate of 11.5%, equivalent to 15,000 - 16,000 new apartments per year. year ( surpassing the supply growth rate in the South area (4.6%) and the West area (5.3%) of HCMC). This growth is thanks to the completed infrastructure, including the Ben Thanh-Suoi Tien metro line.
In the period 2020 - 2025, Supply will increase, but the primary selling price of new projects near the metro will still increase by 40% in the coming years. CBRE's data also shows the rate of price increase in the East of the city, especially in District 2, since the construction of metro line 1 was accelerated in 2015..
The general selling price of apartment projects in Ho Chi Minh City over the past 3 years has increased by an average of 9 - 10%. In which, the projects near the metro increased higher than this average rate, even many projects increased by more than 20% per year, commented Mr. Dinh Minh Tuan, Director of batdongsan.com.vn Ho Chi Minh City branch. .
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Source: CBRE Vietnam
CBRE expects the apartment rental market along Metro Line 1 to become more vibrant thanks to convenient transport connections. Prime areas located near Metro stations in the Eastern City will also attract branded residences..
MASTERI LUMIER RIVERSIDE APARTMENT PROJECT IS THE LAST APARTMENT PROJECT ON METRO LINE NO. 1 IN DISTRICT 2 BE OPENING FOR SALE THIS AUGUST, 2021, ONLY 5 APARTMENTS IS SELL
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For example, the Masteri Thao Dien project (in the mid-end segment) is located on the front of Hanoi Highway when the T5 Tower opens for sale at the end of 2015 prices range from 35 million/m2 to 40 million/m2 (VAT included), after 6 years the average selling price currently (October 2021) is from 63 million - 70million/m2. After 6 years, real estate prices at Masteri Thao Dien project increase on average from 11% to 12% / year
In addition, Estella Height apartment (in the high-end segment): Mid-September 2016: Open for sale T3 and T4 buildings of 2 bedroom and 3 bedroom types: Selling price according to wall area: ranging from 50 million - 55 million/m2 ( 10% VAT included ) . By January 2022, the selling price of the transfer will be as follows:
Unit selling price of 3 bedrooms (T3 and T4 buildings) with full furniture in January 2022: 100 million/m2 ~ 110 million/m2. Thus, after 5 years from the date of sale,the transfer price of a 3 bedroom apartment has increased by about 90% to 100%, an average of 18% to 20%/year..
2 bedroom apartment 101 m2 building T3 and T4, transfer price from 8 billion 300 to 8 billion 700, unit price is from 83 million/m2 ~ 86 million/m2, So after 5 years from the date of opening for sale,The transfer price of 2-bedroom apartments in T3 and T4 has increased by about 60%, an average increase of 12%/year..
With the state promoting investment in infrastructure for the East, along with the establishment of Thu Duc City, when Metro Line 1 is put into operation in early 2022, it is certain that real estate prices along Metro Line No. 1 will have a lot of potential to increase in price in the coming years
Source: CBRE and batdongsan.com
