Mid-range housing segment

(CLO) Associate Professor Dr. Tran Kim Chung, former Deputy Director of the Central Institute for Economic Management Research, predicts that in 2025, the mid-to-high-end housing segment will experience a significant downward adjustment.

The supply is mainly concentrated in the high-end segment.

In 2024, the supply of apartments in major markets such as Hanoi and Ho Chi Minh City showed contrasting trends. However, the supply of newly launched apartments in these two markets shared a common characteristic: the majority belonged to the high-end segment, with expensive prices.

A recently released CBRE report shows that in 2024, the supply of new apartments for sale in Hanoi will reach 30,900 units, a three-fold increase compared to 2023. The average selling price recorded was VND 72 million/m2, a 36% increase year-on-year, the highest increase recorded in the past eight years.

The supply of newly launched apartments in Hanoi and Ho Chi Minh City has one thing in common: the majority belong to the high-end segment, with relatively expensive prices. (Photo: ST)

“The majority of new supply this quarter is concentrated in high-end projects with complete legal documentation, developed in the large urban areas of Nam Tu Liem and Gia Lam, which are already operational with a certain number of residents. This has led to an increase in primary selling prices as well as sales rates exceeding 70% in these projects,” the CBRE report stated.

Conversely, in Ho Chi Minh City, the supply of new apartments launched for sale is the lowest since 2013, with only 5,050 new units offered. Current primary selling prices for apartments average 76 million VND/m2 (net usable area), an increase of nearly 24% year-on-year.

This increase is due to the fact that over 70% of the new supply in the city this year consists of high-end to luxury projects, and projects launching subsequent phases have adjusted their selling prices upwards by 10% to 40% compared to the previous phase.

"Typically, there are projects in the Thu Thiem area offering the final phase of apartments at prices up to 490 million VND/m2 (net usable area)," the CBRE report stated.

Recently, real estate research companies in Vietnam have predicted that the luxury apartment segment will continue to boom and lead the market in 2025.

According to CBRE, the supply of new apartments in Hanoi is expected to remain abundant, estimated at over 31,000 units for sale, higher than in 2024. The supply is mainly concentrated in the high-end segment, with an increase in the supply of luxury apartments.

Meanwhile, according to OneHousing's forecast, the supply of mid-range apartments will almost disappear from both Hanoi and Ho Chi Minh City markets in 2025. The number of new apartment projects launched in the Hanoi market in 2025 is estimated at around 30,000 units. Of these, about 60-70% will be high-end apartments and 30-40% will be luxury apartments.

In the Ho Chi Minh City market, the projected new supply in 2025 is approximately 12,000 units, with high-end and luxury units accounting for 88%. Within that, the high-end segment accounts for 42%, and the luxury segment for 46%.

Will the mid-to-high-end housing segment experience a significant downward adjustment in 2025?

Most opinions suggest that apartment prices in Hanoi and Ho Chi Minh City will increase in 2025. Even the high-end and luxury segments are expected to rise, as they haven't yet reached their peak.

According to experts at OneHousing, many localities have recently implemented new land price lists with relatively high adjustments. This leads to higher input costs for businesses, which in turn will result in higher output prices.

Most opinions suggest that apartment prices in Hanoi and Ho Chi Minh City will increase in 2025. (Photo: ST)

Agreeing with this assessment, Mr. Tran Trung Tuan, a real estate expert, stated: Given that Hanoi and Ho Chi Minh City have announced new land price lists, with adjustments increasing prices by 3-8 times, apartment prices in these two cities will rise regardless of segment. This is not to mention the rising cost of materials and other expenses in recent months. Therefore, Mr. Tuan believes that expecting apartment prices to fall is unrealistic.

Nevertheless, some argue that the mid-to-high-end housing segment will experience a significant downward adjustment in 2025.

Elaborating on this issue, Associate Professor Dr. Tran Kim Chung, former Deputy Director of the Central Institute for Economic Management Research, analyzed: Firstly, the market in 2024 had already risen too high in this segment.

Secondly, the entities in this segment are undergoing significant adjustments in demand, behavior, and outlook.

"Specifically, because the industrial real estate market is projected to grow well in 2025, resources will be channeled into the industrial real estate segment. Other housing and land segments will not experience significant changes," said Associate Professor Tran Kim Chung.

Source: https://www.congluan.vn/phan-khuc-nha-o-trung--cao-cap-se-co-dieu-chinh-giam-lon-trong-nam-2025-post330114.html