Homebuyers are facing difficulties as apartment prices in Ho Chi Minh City remain high.

The average price falls into the... high-end segment.

According to data recently released by Batdongsan.com.vn, in August 2023, apartment prices in Ho Chi Minh City continued to remain stable across all segments, despite continued increasing interest.

However, current prices for this type of property in the Southern market in general and Ho Chi Minh City in particular are pegged at high levels. Specifically, most recent listings for apartment projects in Ho Chi Minh City belong to the mid-to-high-end segment, with prices above 55-70 million VND/m2. Lower-priced properties come from the secondary market, belonging to older projects.

Homebuyers face difficulties as apartment prices in Ho Chi Minh City remain high (Figure 1). — Prices remained stable in August 2023 but were anchored at a high level.

Furthermore, market data from DKRA Group in August clearly shows that the highest primary market price for apartments in Ho Chi Minh City reached 312.7 million VND/m2, while the lowest was 58 million VND/m2. Even in provincial markets like Ba Ria - Vung Tau and Binh Duong , apartment prices have reached an average of over 40-50 million VND/m2.

According to CBRE Vietnam data, the average price of apartments in Ho Chi Minh City during the first three quarters of 2023 was around 63 million VND/m2. Many mid-range projects have approached prices of 70-80 million VND/m2.

Commenting on this issue, Mr. Vo Huynh Tuan Kiet, Director of the Housing Market at CBRE Vietnam, stated that this is a difficult problem for a family wanting to buy a house in Ho Chi Minh City if they rely solely on their income. With an average price of 4-5 billion VND for a 2-bedroom apartment of around 60m2, an average family with an income of about 20 million VND/month would need decades to buy a house without financial support from relatives.

Homebuyers face difficulties as apartment prices in Ho Chi Minh City remain high (Figure 2). — Current average prices are pegged in the high-end segment, making it difficult for the market to maintain liquidity.

Without financial support, besides needing a high income, one would still need to use financial leverage to own an apartment at the present time. Meanwhile, the demand for housing among the population remains very high for the next year.

Specifically, the Vietnam Real Estate Consumer Sentiment Report for the second half of 2023 by Batdongsan.com.vn shows that the demand for apartments priced under 50 million VND/m2 in Ho Chi Minh City increased by more than 29% compared to the same period last year.

It's difficult to find an apartment under 40 million VND/m2.

According to many experts, it is currently very difficult to find an apartment priced at around 40 million VND/m2 in Ho Chi Minh City. For example, the price of apartments in a project in District 9 (Thu Duc City), which has the most abundant supply in the Ho Chi Minh City market, is still around 60-80 million VND/m2.

Similarly, some projects located far from the city center, such as Binh Tan, Nha Be, and Binh Chanh, are still maintaining relatively high prices compared to actual demand. A few projects priced below 50 million VND/m2 mostly come from projects that have been underway for a long time and have recently restarted after resolving legal issues.

Therefore, those who are looking to buy a home for personal use can currently only find apartments priced around 40 million VND/m2 in projects located in provinces adjacent to Ho Chi Minh City, although even these are quite limited in supply.

Homebuyers face difficulties as apartment prices in Ho Chi Minh City remain high (Figure 3). — The imbalance between supply and demand in product pricing is a difficult problem.

The supply-demand imbalance and the problem of high prices are explained by the rising project development costs. Many products are also stalled or hampered by objective factors, causing costs to increase significantly. Therefore, when the products are brought to market, the price is no longer suitable for the majority of actual demand.

Meanwhile, demand from genuine homebuyers is the biggest driver supporting the market's liquidity recovery. This customer group has the highest demand for housing but lacks suitable products to purchase.

Therefore, in the coming period, the most important issue to "rescue" the market is to improve the supply structure, focusing on developing products that suit the budgets of the vast majority of homebuyers. This is partly why liquidity, which had sharply declined recently, is gradually recovering.

Speaking at a recent real estate seminar, Mr. Vo Huynh Tuan Kiet, Director of Residential Properties at CBRE Vietnam, emphasized the supply-demand imbalance. He stated that while the actual demand for housing is very high, the supply of properties that meet this demand is very limited. In particular, the 2-3 billion VND/unit price segment is experiencing a severe shortage of supply, which is alarming.

Sharing his views on the future outlook for the real estate market, the Director of CBRE stated that the supply of real estate has partially returned to the market. Recently, many projects have announced that they have obtained construction permits, and some projects have resolved financial pressures and legal obstacles.

"Although the real estate market remains volatile, its long-term potential is highly valued. Real estate is still one of the important sectors of the economy , so the government prioritizes addressing its challenges. In the future, the market will develop in a more sustainable direction," emphasized the CBRE expert.

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