"Getting burned" with townhouses and villas worth tens of billions of dong

Townhouse and villa segment still has not improved supply

For many years, the real estate segment of villas, townhouses, and luxury projects in Ho Chi Minh City and neighboring provinces has been considered only for investors.

Recently, the authorities have tightened the legal framework for projects, making it difficult for businesses to carry out procedures and find suitable land for projects, making the supply of this segment increasingly scarce.

According to Savills Vietnam's report on the Ho Chi Minh City real estate market in the first 6 months of 2024, the townhouse and villa segment has not yet improved new supply due to scarce land funds and investors are also facing difficulties, limiting the implementation of this segment.

Villas cost tens of billions of dong.

Primary supply decreased 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 over 77% of primary supply.

Most of these high-end products are located in urban areas and are mainly concentrated in Thu Duc city; Binh Tan district... Regarding transactions, Savills Vietnam data shows that this market is facing many challenges when in the second quarter of 2024, there were only 72 transactions, down 36% quarterly and annually. Since 2019, the number of transactions in this segment has continuously decreased.

Villas and townhouses are at very high prices.

Unlike Ho Chi Minh City, in satellite areas such as Dong Nai, Binh Duong , and Long An provinces, the villa and townhouse segment is also dominating the market in terms of supply. According to DKRA Vietnam, many "eagles" are appearing in these areas to do projects, which is attracting cash flow and pushing up the prices of villas and townhouses.

Prices increase "dizzily"

According to Nguoi Dua Tin , in Ho Chi Minh City, real estate products such as villas and townhouses are currently attracting the attention of investors from projects such as Van Phuc City Urban Area (asking price from brokers is about 26 billion/160m2 apartment); The Global City Project (asking price from brokers is about 38 billion/apartment); The Classia (asking price from brokers is about 30 billion/150m2 apartment); The Sholi (asking price from brokers is about 13 billion/90m2 apartment).

In the provinces adjacent to Ho Chi Minh City, there are also many villa and townhouse projects such as Eco Village Saigon River (price offered by brokers is about 17 - 30 billion/unit); HimLam Phu Dong (price from 8 - 15 billion/unit); Sycamore Binh Duong project (townhouses, semi-detached and detached villas priced from 8 - 20 billion/unit)...

Villa and townhouse projects that have come into operation increase in price over time.

According to experts, the townhouse real estate segment has remained at a very high price for many years. Although market liquidity is not as good as in previous years, the fact that projects have complete legal procedures, are located in prime locations, and have complete infrastructure has caused product prices to increase.

Mr. Pham Van Binh, General Director of Keyone Land Real Estate Investment and Development Joint Stock Company, commented that the price of townhouses and villas in Ho Chi Minh City has always increased over the years, especially large projects with systematic legal infrastructure.

Although going through a difficult period, the price of this segment still rarely decreases because F1 and F2 investors bought at high prices. Although secondary liquidity is not active, to reduce the price lower than buying and taking risks, investors certainly will not sell.

Townhouse villa projects are waiting for residents to move in.

According to Mr. Binh, legal problems and scarcity of land to build townhouse villa projects have caused a shortage in supply, which has also contributed to the price increase and increase in this segment.

Mr. Troy Griffiths – Deputy General Director, Savills Vietnam assessed that the supply of villas and townhouses is still limited and the demand is met in neighboring provinces. With scarce land fund and support from infrastructure, house prices in Ho Chi Minh City have tripled in the primary market and doubled in the secondary market in the past 5 years. The increase in selling prices has pushed home buyers with real residential purposes to neighboring provinces for more suitable options.

Mr. Troy Griffiths – Deputy General Director of Savills Vietnam.

According to Savills Vietnam, with scarce land funds and support from infrastructure, housing prices in Ho Chi Minh City have tripled in the primary market and doubled in the secondary market over the past five years.

Rising prices have pushed home buyers with real residential purposes to neighboring provinces for more suitable options.

A townhouse project in Long An province bordering Ho Chi Minh city.

It is expected that by 2026, Ho Chi Minh City will no longer have low-rise products priced under VND5 billion and only 10% of primary supply will be priced under VND10 billion. Meanwhile, products with this price range account for 85% of supply in Binh Duong and 55% in Dong Nai.

Meanwhile, experts from DKRA Group predict that the supply of townhouses and villas in the last months of the year will fluctuate around 950 - 1,050 units, distributed mainly in Ho Chi Minh City and the suburbs. To stimulate the market, investors are also flexibly adjusting payment methods, sales policies, etc. to suit the actual situation.

Source: https://www.nguoiduatin.vn/tphcm-phong-tay-voi-nha-pho-biet-thu-hang-chuc-ty-dong-204240711104532355.htm