Primary apartment prices fall, HCMC market lags behind Hanoi

According to Savills' Q3/2024 market report, apartment supply in Ho Chi Minh City remains limited, down 13% quarter-on-quarter and 36% year-on-year to 4,871 units. The reason cited by this research unit is that inventory has decreased and no new projects were launched for sale in the quarter.

New supply in the quarter was 799 units, coming from the next phases of 6 projects, down 30% quarter-on-quarter. Notably, five projects reopened for sale with 545 apartments, after legal issues were resolved. In the new supply structure, class B apartments accounted for the majority of supply with 60% market share, followed by class C with 38% and class A with 2%. Of which, the East area (Thu Duc City) alone accounted for 58% of the market share, and the West area (District 6, Binh Tan) accounted for 20%.

Transaction volume in the quarter also decreased 16% QoQ and 4% YoY to 1,915 units. Absorption rate decreased 2 percentage points QoQ to 39% but increased 13 percentage points YoY. New supply achieved an absorption rate of 62%, while inventory achieved an absorption rate of 35%.

The decline in supply has affected market indicators (Photo: Savills)

Class B apartments account for 66% of transactions, coming from projects developed by reputable investors, with reliable construction progress and sales policies with many incentives. In particular, projects under completion and projects ready for handover have launched many attractive sales policies to attract buyers.

Of these, two completed projects in Tan Phu only require customers to pay a total of 15% of the apartment value to receive handover, with a payment schedule spread over 24 months. These are factors that can stimulate liquidity in the coming time.

Notably, the average primary price of apartments recorded a 12% decrease quarter-on-quarter to VND68 million/m2, mainly due to the decrease in the proportion of Grade A and B in the primary supply. With this price, the Ho Chi Minh City market was "overtaken" by Hanoi when the average price of newly launched products in the capital recorded in the third quarter of 2024 was VND69 million/m2.

This is not too surprising when the apartment market in Hanoi has increased "hotly" since the beginning of 2024 until now. Since then, the gap between the two markets in Hanoi and Ho Chi Minh City has been getting closer every quarter. Especially when the primary price of apartments in Hanoi continued to increase by 6% quarter-on-quarter and 28% year-on-year in the last quarter.

The sideways market has made apartment prices in Ho Chi Minh City lower than in Hanoi.

However, the fact that apartment prices in Ho Chi Minh City are flat is not a bad sign when this market is seriously lacking in supply and the real demand is still very high. However, Mr. Troy Griffiths - Deputy General Director of Savills Vietnam also gave a positive assessment of the apartment supply of this market in the coming period, when key infrastructure projects and new laws "permeate" into the market.

“Primary supply is limited, but will improve in the coming quarters. Amended laws, updated planning and key infrastructure projects are expected to be the driving force supporting the market,” said Savills experts.

According to Savills' report, by the end of 2024, the supply basket in Ho Chi Minh City will have about 6,700 apartments expected to be opened for sale, including notable projects such as Vinhomes Grand Park - The Opus One and The Forest Gem. By 2027, more than 50,000 apartments from 76 projects will be opened for sale. Of which, Thu Duc City will account for 49% of the supply, District 7 accounts for 12% and Binh Tan accounts for 9%.

Source: https://www.congluan.vn/can-ho-so-cap-rot-gia-thi-truong-tp-hcm-lai-chay-sau-ha-noi-trong-quy-iii-2024-post315228.html