Following the apartment price surge in Hanoi , the market for both new and old apartments in Ho Chi Minh City has recently become more vibrant as buying and selling demand increases. This is explained by the fact that the market has gradually overcome its difficulties, and significantly reduced interest rates have stimulated demand for both residential and rental purposes.
Demand increased sharply
Observations at high-end apartment complexes such as Vinhomes Central Park (Binh Thanh District), Vinhomes Ba Son (District 1), and Vinhomes Grand Park (Thu Duc City) show that information about buying and selling apartments is constantly being exchanged quite actively by both freelance brokers and real estate agencies.
According to a real estate agent named Dung, there is currently a high demand for Vinhomes apartments for rent because rental prices are quite good, yielding higher returns than bank deposits. Dung calculated that with an investment of 3.5 billion VND for a one-bedroom apartment in Vinhomes Central Park, renting it for 17-18 million VND per month would generate an average annual income of 200-210 million VND, representing a return of over 6%.
Not to mention, apartment rental prices can increase annually, and apartment prices also increase correspondingly by 3%-5% per year. Meanwhile, the annual interest rate on savings deposits is less than 5%. "Currently, customers mainly buy with cash, and they are interested in one-bedroom apartments because they are easy to rent out. Currently in Vinhomes Binh Thanh, an officetel unit costs around 3.5-3.6 billion VND, while apartments with permanent ownership have reached 4.2-4.3 billion VND," this real estate agent said.
The apartment market in Ho Chi Minh City is showing signs of price increases again. Photo: TAN THANH
In other upscale areas like The Sun Avenue and Masteri Thao Dien in Thu Duc City, the demand for apartments has also increased significantly compared to 2023, with buyers and sellers transacting quickly without the hesitation seen a few months ago.
According to Mr. Tuan Hoang, a real estate agent in Binh Thanh District, District 1, and parts of Thu Duc City (formerly District 2), the demand for buying and renting apartments in well-equipped residential areas has clearly increased since the beginning of the year. Agents are constantly asking each other about available properties to introduce to clients. Due to the increased demand, apartment prices have also risen by about 3%-5% in just a few months, averaging an increase of 200-500 million VND per unit, while larger, more luxurious apartments can see price increases of up to 700 million VND.
In the more affordable segment, projects like City Gate Towers – located on Vo Van Kiet Street (District 8) – are attracting considerable interest, especially from those with average incomes, due to their accessible prices of 2.1-2.5 billion VND for a two-bedroom apartment. Ms. Luong, a real estate agent for this apartment complex, said that recently, many young couples have inquired about buying homes in this area because of the reasonable prices and convenient transportation.
Dr. MT, a young doctor working at Le Van Thinh Hospital (Thu Duc City), said he recently bought a two-bedroom apartment, over 60 square meters, on Lien Phuong Street, Thu Duc City, for nearly 2 billion VND. "Someone was selling a cheap apartment near my workplace, and bank interest rates are low, so I decided to borrow a few hundred million VND to buy the house and pay it back in installments of 10 million VND per month. This amount is about 2-3 million VND more than my rent, but in return, I have a place to live and work, and I'll pay off the debt in a few years," Dr. T. shared.
Buyers are afraid of missing out.
The real estate market in Ho Chi Minh City is gradually recovering, including the apartment segment, so notary offices are also busier than before. A notary on Xo Viet Nghe Tinh Street (Binh Thanh District) said that the number of customers coming to notarize land and property procedures, especially apartments, has recently increased by 20%-30% compared to a year ago.
At the socio -economic meeting of the Ho Chi Minh City People's Committee on the afternoon of May 3rd, the Ho Chi Minh City Department of Natural Resources and Environment reported that it had processed over 120,000 land and housing transaction files in the first four months of the year, a 13% increase compared to the same period in 2023, equivalent to 15,000 files.
Transactions were mainly concentrated in four areas: Thu Duc City, Binh Tan District, District 12, and Cu Chi District. The vibrant real estate market also contributed to the growth of revenue from land registration and issuance of land use rights certificates in Ho Chi Minh City, reaching over 2,500 billion VND.
A newly released survey by the Dat Xanh Services Institute for Economic, Financial, and Real Estate Research (DXS-FERI) shows that demand for real estate, primarily apartments, increased sharply in the first quarter of 2024. Specifically, nearly 80% of customers switched from renting to buying apartments as interest rates remained low. Of these, 58% purchased for personal use, 18% for rental income, and 16% for long-term investment, with only 3%-5% for short-term investment or other purposes.
According to the same survey, the most popular apartment price range for respondents was 68%, with 2.5-3.5 billion VND accounting for 22%, approximately 7% interested in the 3.5-5 billion VND segment, and only 3% interested in purchasing luxury apartments priced above 5 billion VND.
Explaining the recent surge in real estate demand in many localities, Mr. Tran Khanh Quang, General Director of Viet An Hoa Real Estate Investment Company, said that in the context of the real estate market having overcome its most difficult period, with both deposit and lending interest rates falling sharply, developers continuously offering preferential policies to boost sales, and especially with the government's intensified support measures for the real estate sector, market confidence has been boosted. Investors and those with a need to buy houses and land have had their psychological barriers removed, believing that "it's time to buy," otherwise they will "miss the opportunity," "miss the good price," etc., thereby stimulating transaction activities in the apartment market.
What is happening in the Hanoi apartment market is the clearest evidence. "It's understandable that buyers at this time are choosing apartments with complete legal documentation for investment, rental, or personal use, because this segment always generates good cash flow. As far as I know, apartments that have been handed over or are about to be handed over have increased in price by 8%-12% from their lowest point in the past year. In Hanoi, apartment prices have increased by 30%-50% in the last 1-2 years," said Mr. Khanh Quang.
According to Mr. Le Bao Long, Director of Strategy at Batdongsan.com.vn, in urban areas like Hanoi and Ho Chi Minh City, besides land plots, the demand for buying apartments for both living and investment has consistently attracted investment capital for many years. And in 2024, the apartment segment will continue to attract investment capital.
Supply is scarce, making it difficult for prices to fall.
According to experts, the scarcity of supply and continued increase in demand are the reasons why apartment prices are unlikely to fall in the near future.
According to a report by the Ministry of Construction, in the first quarter of 2024, only 10 commercial housing projects were completed nationwide, comprising 4,706 units, equivalent to 34.48% of the fourth quarter of 2023 and 71.43% of the same period in 2023. Of these, only 3 projects were in the South. In addition, 19 new projects were licensed, totaling 9,774 apartments, equivalent to 95% of the previous quarter and 111.76% of the same period in 2023, but these were mainly concentrated in the North; there were no projects in the South.
CBRE Vietnam's Q1/2024 report also shows that the supply of apartments in Hanoi and Ho Chi Minh City continues to be scarce. In particular, in Ho Chi Minh City, only about 500 apartment units were offered for sale, the lowest in about 15 years and only about 17% compared to the same period last year.
Source: https://nld.com.vn/thi-truong-can-ho-o-tp-hcm-soi-dong-196240506215530072.htm
Comment (0)