Ho Chi Minh City has recorded average apartment prices ranging from 40-60 million VND/m2 in suburban districts and up to 100 million VND/m2 in central areas, exceeding the affordability of many middle-income families.
Where is the focus of real estate development in the Ho Chi Minh City region?
According to information presented at the seminar "Cash Flow into Southern Real Estate: Identifying Investment Opportunities," organized by the Vietnam Real Estate e-magazine (Reatimes), the Vietnam Institute of Real Estate Research (VIRES), in collaboration with the Vietnam Association of Real Estate Brokers (VARS) and Bcons Group, Assoc. Prof. Dr. Tran Kim Chung, former Deputy Director of the Central Institute for Economic Management Research ( Ministry of Planning and Investment ), stated that the market for land plots in Ho Chi Minh City and its surrounding areas in the first eight months of 2024 saw 14 projects launched, supplying 787 products to the market, a decrease of 46% compared to the same period in 2023.
The consumption rate of new supply reached approximately 30%, corresponding to 237 products successfully transacted, a decrease of 58% compared to the same period in 2023.
In August 2024, the townhouse and villa segment in Ho Chi Minh City and its surrounding areas saw the launch of 16 projects, supplying 1,333 units to the market, a twofold increase compared to the same period in 2023. The absorption rate of new supply reached 61%, corresponding to 817 successful transactions, a 3.5-fold increase compared to the same period in 2023.
In the apartment segment, new supply brought to the market reached 5,378 units, a decrease of 24% compared to the same period in 2023, mostly consisting of subsequent phases of projects, mainly concentrated in Ho Chi Minh City and Binh Duong . The absorption rate reached 76% of the new supply launched onto the market, with 4,086 successful transactions, a decrease of 22% compared to the same period.
For resort properties, secondary market prices have fallen sharply, with many investors accepting losses of 20%, or even 30%, but liquidity remains very difficult.
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| Overview of the seminar "Cash Flow into Southern Real Estate: Identifying Investment Opportunities". |
Regarding the flow of capital into the Ho Chi Minh City real estate market, statistics show that real estate credit outstanding in Ho Chi Minh City continues to maintain its growth rate, with each month exceeding the previous one. By the end of July 2024, the total real estate credit outstanding in the city reached over 1 trillion VND, accounting for 27.6% of the total credit outstanding and increasing by 5.5% compared to the end of 2023, higher than the overall credit growth rate in the city.
According to Mr. Chung, the focus of real estate market development in the Ho Chi Minh City region will include the inner districts and the provincial capitals of Binh Duong, Dong Nai, and Long An . Secondly, the axis connecting Ho Chi Minh City with the provincial capitals of Binh Duong, Dong Nai, and Long An, with Ho Chi Minh City as the center, will open up and promote the development of urban areas connected to Binh Duong, Bien Hoa, and Tan An.
Thirdly, the urbanization of Ho Chi Minh City and the provincial capitals of Binh Duong, Dong Nai, and Long An will promote and expand real estate development in a way that spreads to the outskirts of Ho Chi Minh City, the outskirts of Tan An, Binh Duong New City, and the outskirts of Bien Hoa City.
Fourth, new urban areas in the Ho Chi Minh City region, such as Nhon Trach city, Binh Duong new city, and Long Thanh airport city, will increasingly grow in area, their value will increase, and the complexity of these urban areas will become more apparent.
Fifthly, there are TOD (Transit-Oriented Development) cities in Ho Chi Minh City, Binh Duong, Long An, Tay Ninh, and Ba Ria - Vung Tau. The Ho Chi Minh City region concentrates many large-scale national infrastructure projects, which will inevitably create opportunities for the development of TOD cities in particular and the real estate market in general.
Sixth is the new Thu Duc – Long Thanh – Bien Hoa – Binh Duong urban quadrilateral. This is a region with great urban development potential, a unique characteristic of the Ho Chi Minh City region by 2030, with a vision to 2045. With all the advantages in terms of land, infrastructure, and economic support, this is a unique area for the economic development of the Ho Chi Minh City region in general, urban development in particular, and especially the development of the real estate market.
Real estate prices are beyond affordability, and demand exceeds supply.
According to Mr. Le Nhu Thach, Chairman of the Board of Directors of Bcons Group, the average price of apartments in Ho Chi Minh City ranges from 40-60 million VND/m2 in suburban districts and up to 100 million VND/m2 in central areas, exceeding the affordability of many middle-income families. Currently, the demand for housing in Ho Chi Minh City is very high, estimated at around 50,000 apartments per year to meet the needs of the people. However, the supply cannot keep up with this demand due to many factors. Among them, legal barriers, increasing land costs, and the shortage of affordable apartments are the main reasons why the market cannot develop synchronously.
In fact, about 60-70% of current housing demand falls within the affordable segment. This shows that people, especially those with middle and low incomes, are in great need of housing solutions that suit their financial capabilities. However, the market is currently lacking affordable housing projects, making it difficult for many to find a place to live.
In particular, the issue of customer trust is very important. Many projects have been handed over but the certificates have not been delivered to customers, causing customers to worry and it is necessary to restore customer trust.
According to Mr. Thach, in major cities of the Southeast region such as Ho Chi Minh City, Binh Duong, and Dong Nai, the need for housing for middle and low-income groups, including workers and migrant laborers, is becoming increasingly urgent. However, the supply of social housing and affordable housing remains very limited, failing to meet the actual needs of this group. This situation forces many people to live in cramped, low-quality rented accommodations lacking basic amenities, affecting their quality of life and health.
"The demand for apartments priced under 2 billion VND in Ho Chi Minh City is increasing, however, the reality shows that the supply of new apartments in 2024 is extremely limited, driving up prices and making it difficult for many people to find suitable housing," Mr. Thach shared.
Source: https://baodautu.vn/batdongsan/tphcm-khat-can-ho-duoi-2-ty-dong-d228833.html
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