Narrow door gap for villa and townhouse segment in the South

Only 10% of villa and townhouse supply is priced under 10 billion VND

Recently, DKRA Joint Stock Company (DKRA Group, real estate services group) has reported on the real estate segment of villas and townhouses in Ho Chi Minh City and neighboring areas.

According to DKRA research, the primary supply of villas and townhouses is currently decreasing slightly, down 8% compared to the previous month, in which Ho Chi Minh City and neighboring areas account for more than 75% of the total primary supply of the market. Last month, the market welcomed about 4,466 units from 88 projects.

The supply of villas and townhouses in Ho Chi Minh City comes from Thu Duc City area (Ho Chi Minh City).

In general, the demand for villa and townhouse projects from investors and residents is still considered low (consumption only reached 5%), with the total primary supply decreasing by 48% compared to the previous month. In particular, the area bordering Ho Chi Minh City accounts for more than 50% of the primary consumption of the market.

The segment of villas and townhouses over 10 billion VND is currently being selective in transactions. However, transactions are mainly distributed in the product group with prices under 10 billion VND/unit, implemented by reputable investors in the market, ensuring legality and construction progress.

Mr. Vo Hong Thang, Investment Director of DKRA Group, commented: "The villa and townhouse segment in Ho Chi Minh City currently has quite high selling prices due to limited supply, and transaction projects mainly come from areas with high prices. This causes investors to shift to finding real estate products under 10 billion to trade."

According to DKRA's research, the current selling price and primary floor area in the villa and townhouse segment continue to trend sideways compared to the beginning of the year. Market stimulus policies, cash flow support, etc. are widely applied by investors to increase liquidity.

Previously, data from Savills Vietnam Co., Ltd. (a real estate market research unit) showed that the townhouse and villa segment has not yet improved its new supply due to scarce land funds. In addition, this segment also faces many difficulties due to complicated legal procedures and cautious psychology from investors.

Villa area worth hundreds of billions of VND/unit in Ho Chi Minh City located next to Saigon River.

Primary supply decreased by 12% QoQ and 33% YoY to 668 units, due to limited new supply and inventory absorption. High-end products priced above VND30 billion dominated with more than 77% of primary supply.

Regarding transactions, Savills Vietnam data shows that this market is facing many challenges as there were only 72 transactions in the second quarter, down 36% quarter-on-quarter and year-on-year. Since 2019, the number of transactions in this segment has continuously decreased.

A project of villas and townhouses with completed legal documents priced under 10 billion VND.

According to Savills' forecast, the real estate market is expected to welcome more than 880 townhouses and villas in the last months of the year, mainly from the next phases of existing projects.

Products priced above VND20 billion will account for 80% of future supply. By 2026, future supply is expected to reach 4,663 units, mainly concentrated in the old District 2 (now Thu Duc City), Binh Chanh and Nha Be. It is expected that by 2026, Ho Chi Minh City will no longer have low-rise products priced below VND5 billion and only 10% of primary supply will be priced below VND10 billion.

Changes in real estate law have more or less impact on the market.

The villa and townhouse segment in Ho Chi Minh City and neighboring areas such as Binh Duong and Dong Nai is always of interest to investors and they spend money to buy when they have the opportunity. The reason is because of the long-term profits that this segment brings. Because the market is still facing many difficulties, investors are actively "hunting" for cheap villas and townhouses.

Talking to Nguoi Dua Tin , Mr. Quoc Truc (an investor) said that currently, if you are in Ho Chi Minh City, it is very difficult to find a project or a secondary townhouse to buy because there are no cheap prices. Most new projects with standard legal documents and completion sell for more than 10 billion VND/unit, depending on the area.

Especially in areas with projects like Thu Duc City, there are apartments that investors sell for up to 15 - 25 billion VND. This is one of the quite high prices for investors and is generally only for those with strong economic potential.

"However, currently, investors are looking to buy townhouses and villas under 10 billion VND, simply because the prices are low. Meanwhile, with this financial range, transactions are liquid, especially when buying and selling with notarized documents, handover is easier, and buyers are also more secure," said Mr. Truc.

Investors learn about the project before investing.

Meanwhile, Mr. Nguyen Duc Luan (real estate broker) said that buying and selling villas and townhouses in the period from the beginning of the year is more difficult, when the projects are mainly selling for tens of billions of dong. "However, recently I have been able to make a transaction of a townhouse in Hiep Binh Chanh ward, Thu Duc city for more than 9 billion dong. This is a project house, but the owner reduced the price because he needed finance. Therefore, when it was put on sale, there were people asking to buy and doing the procedures right away," Mr. Luan revealed.

Talking to Nguoi Dua Tin , Mr. Nguyen Viet Hung, Chairman of the Western Alliance Joint Stock Company, commented: "Currently, villas and townhouses under 10 billion VND will certainly have transactions and attract investors. Firstly, the price is low and negotiable. Secondly, with this financial segment, buying and selling will be easier, avoiding having to lock up capital for too long."

Mr. Nguyen Viet Hung, Chairman of Western Alliance Joint Stock Company.

"After August 1, the Land Law and the Real Estate Business Law will take effect, especially the fact that Ho Chi Minh City has issued a draft table to adjust land prices for the whole city. This information will more or less affect the real estate market. In the future, the prices of real estate products with full legal documents may increase. Therefore, at the present time, investors are willing to spend money to buy low-priced villas and townhouses with full legal documents, waiting for the next fluctuations of the market," Mr. Hung shared.

According to Mr. Hung, currently, villas and townhouses priced under 5 billion VND are still available, but they mainly appear in areas such as Long An and Binh Duong and the travel time is very far. These products are suitable for long-term investors, with a workplace near the project or area.

"This is also one of the potential products of the market, because the supply is getting less and less, investors should choose many areas, divide their finances reasonably to make a profit or use the product according to their needs," Mr. Hung shared.

Source: https://www.nguoiduatin.vn/khe-cua-hep-cho-phan-khuc-biet-thu-nha-pho-phia-nam-204240916004633804.htm