The supply of apartments in Ho Chi Minh City is at a record low in the past 10 years, causing the market to face increasingly expensive housing prices. In this context, the surrounding area of Ho Chi Minh City is a suitable alternative with abundant supply and affordable prices.
Loss of apartment under 2 billion VND
Savills Vietnam data shows that in Ho Chi Minh City, the apartment supply in 2023 will only reach 10,700 units. Notably, the number of apartment transactions over the past 10 years has continuously decreased by 7% per year. In the context of scarce supply and high house prices, the market only recorded 6,300 transactions in the entire past year.
Also according to Savills’ report, new supply accounts for 78% of the market share of transactions and has an absorption rate of 84%. These projects sell well thanks to clear legal regulations before launch, long payment periods, bank loan support and accessible prices ranging from 2-5 billion VND/unit.
The number of apartment transactions over the past 10 years has decreased continuously by 7% per year.
If new supply is excluded, market transactions are still weak with only 670 units sold, corresponding to an absorption of 14%. Primary selling prices returned to 2020 levels of 69 million VND/m2, down 36% quarter-on-quarter and 45% year-on-year after many expensive projects had to temporarily close their shopping carts.
Ms. Giang Huynh, Deputy Director and Head of Market Research and S22M, said that in 2023, Ho Chi Minh City will no longer have products under 2 billion VND, 90% of transactions will be in the segment of 2-5 billion VND/unit. .
“In the period from 2024-2026, the number of apartments priced at 2-5 billion VND is increasingly scarce, the supply is mainly concentrated in the segment of 5-10 billion VND/unit. Therefore, home buyers in Ho Chi Minh City may switch to buying products in neighboring areas such as Binh Duong, Dong Nai and Long An at more affordable prices,” Ms. Giang analyzed.
The change throne
Also according to this expert, in 2024, 96% of future house supply in Binh Duong, Dong Nai and Long An will be in the price segment under 5 billion VND/unit. Therefore, this is considered the solution to the “thirst” for affordable housing in the Ho Chi Minh City area.
Ms. Giang analyzed that apartment products in Binh Duong and Dong Nai still maintain competitive prices compared to the Ho Chi Minh City market. This makes these areas attractive destinations for homebuyers. Housing demand in Binh Duong is increasing strongly due to industrial development and increased immigration rate. This creates a stability in market demand and ensures the continued development of the regional real estate market.
Grasping this trend, many investors and real estate businesses have returned to Binh Duong to develop affordable apartment products. Recently, in Binh Duong, businesses have begun to launch a series of affordable apartment projects on the market such as Hung Thinh, Dat Xanh, Phu Dong Group, Danh Khoi, Le Phong…
For example, Bcons Group develops the Bons Polaris project at about 37-41 million VND/m2, the selling price of Phuc Dat Connect 2 project of Phuc Dat Group is about 40 million/m2, the Picity Sky Park project is expected to be about 40-45 million VND. million VND/m2, Phu Dong Group is developing the Phu Dong SkyOne project with a selling price of around 1.5 billion VND/unit…
96% of future housing supply in Binh Duong, Dong Nai and Long An is in the price segment under 5 billion VND/unit.
In addition, Binh Duong also receives attention from foreign investors, such as CapitaLand… It is expected that primary apartment prices from new projects will increase slightly due to increased development costs, while apartment prices Secondary households may decrease slightly in the short term due to a slowdown in market absorption.
“However, with the rapid growth rate in recent years, the supply of secondary apartments has been handed over and the future supply is expected to increase sharply in Binh Duong, creating great competitive pressure for new projects. This can cause challenges in setting prices for new projects, especially when construction and project development costs are increasing,” said Deputy Director of Savills.
Duy Quang