Luxury apartments dominate the market, where do people look for housing?

(Dan Tri) - Apartment prices in Ho Chi Minh City are increasing steadily every year and at a high level. Experts recommend discussing solutions to disperse the population and expand the Ho Chi Minh City urban area by investing in infrastructure.

For nearly a year now, Mr. Tran Van Chien and his wife (living in Thu Duc City, Ho Chi Minh City) have been patiently looking to buy a newly opened apartment in the 3 billion VND price range but have been almost helpless.

The area where Mr. Chien lives is a "bright spot" in the supply of new apartments in Ho Chi Minh City last year, with a number of projects offered for sale around the An Phu intersection, Do Xuan Hop and Lien Phuong streets, and Nguyen Xien street.

However, most of the projects announced prices are over 100 million VND/m2 or more, to buy one you have to spend from 6-7 billion VND/unit, double the financial capacity of Mr. Chien's family. "After patiently looking for a house for a whole year, my wife and I hoped and then were disappointed. Many sleepless nights thinking about the house," he said.

According to data from the Ho Chi Minh City Department of Construction, in 11 months, the city had only 4 commercial housing projects, equivalent to more than 1,600 units, eligible to mobilize capital to bring products to the market and all were high-end products. In 5 years, this number is the lowest.

The total capital mobilization value of these more than 1,600 houses is 15,142 billion VND, the average house price is up to 9.39 billion VND/house.

Number of capital mobilization and project transfer projects in Ho Chi Minh City, period 2020 - 11M/2024 (Source: HoREA).

Mr. Le Hoang Chau - Chairman of the Ho Chi Minh City Real Estate Association (HoREA) - said that for the first time, high-end housing dominates the entire Ho Chi Minh City real estate market, there is no longer a supply of mid-range housing, and new affordable housing in commercial projects is available.

The housing product structure in the market is "distorted", not meeting the real housing needs of middle-income and low-income urban people. The market is developing unsustainably, unsafely and unhealthy.

The association found that the average house price of the new supply is 9.39 billion VND/unit. This is only the primary house price because the investor registered the house price with the Department of Construction when establishing the investment project, so the actual selling price of the house on the market will certainly be higher.

The association analyzed that the continuous increase in housing prices in recent years is due to the limited supply of commercial housing projects, leading to a continued shortage of products. According to the law of supply and demand, the increase in apartment prices is about 15-20% in the period 2015-2023 and according to the Ministry of Construction , with the adjusted land price list in 2024, housing prices can increase by 15-20% in 2025.

Apartment prices in Ho Chi Minh City are forecast to increase by 8-10% per year (Photo: Trinh Nguyen).

At a recent event, Ms. Duong Thuy Dung - Senior Director of CBRE Vietnam - said that in 2025, supply in Ho Chi Minh City will continue to be scarce, with only about 8,000-9,000 units. This situation will last until 2026 when the city will only have about 11,000 new houses for sale.

Along with the scarcity of supply, 80% of the basket of products for sale in Ho Chi Minh City will also be in the high-end, luxury segment, priced above 60 million VND/m2. The market has almost no affordable housing (under 25 million VND/m2), and there are even no mid-range projects (under 40 million VND/m2). This situation will cause apartment prices in Ho Chi Minh City to continue to increase, with an average amplitude of 8-10%/year.

To reduce real estate prices, experts from the above unit recommend promoting population dispersion and expanding urban areas. In Ho Chi Minh City, investors can see many central areas with prices of 150-200 million VND/m2 of apartments, but suburban areas are only 40-50 million VND/m2. Therefore, if people can go further, prices will decrease, but that is a story for the next 5-10 years.

Speaking to Dan Tri reporter, Ms. Dung explained that when people are willing to go further to own a house, the necessary condition is that the traffic connection must be more convenient. In addition, the issue of reducing house prices in central areas with existing land should not be raised, but rather the need to increase land funds in new areas, located outside the center.

This year, the supply of apartments in Hanoi overwhelmed that of Ho Chi Minh City, about 30,000 apartments, of which 70-80% are located outside the central area (Gia Lam, Long Bien, Dong Anh, Tay Mo). The products are well absorbed thanks to good infrastructure connectivity, people can travel from the suburbs to the center in less than 1 hour.

On the contrary, Ho Chi Minh City has not been able to do that, many large urban areas in the suburbs such as Cu Chi have not developed for 10 years due to lack of infrastructure connection. Experts from CBRE Vietnam believe that traffic connection is an important factor in reducing housing prices in Ho Chi Minh City, so that people can own houses at reasonable prices.

Sharing this view, economic expert Dinh The Hien said that people who want to own a house will have to look in areas bordering large urban areas of Ho Chi Minh City such as Dong Nai, Binh Duong, and Ba Ria - Vung Tau.

Source: https://dantri.com.vn/bat-dong-san/can-ho-cao-cap-ap-dao-thi-truong-nguoi-dan-tim-nha-o-dau-20241219083022723.htm