Ho Chi Minh City – How is the apartment market going?

While the high-end and luxury segments are difficult to liquidate, mid-end apartments with affordable prices can still be sold.

JLL's Q2 2022 report indicates,

The supply of apartments in HCMC shows signs of growth. In the quarter, there were 3,347 units offered for sale, an increase of 246.8 percent compared to the previous quarter. Total new supply came from projects in the mid- and high-end segments, of which first-time projects accounted for about 54.8% of new supply.

According to this unit, a number of prominent projects leading the market include phase 2 of Nam Long Group's Akari City project (Binh Tan District) introducing 200 apartments priced from 45 million VND/m2, almost sold out. over the weekend; PiCity Highpark project (District 12) with 974 units and Diamond Century subdivision of Celadon City (Tan Phu District) with 746 units. In addition, Thu Duc city market also witnessed a series of large-scale projects that were pre-launched in the quarter such as Lumiere Boulevard (2,517 units), The Beverly Solari - Vinhomes Grand Park (3,000 units)...

However, according to a JLL representative, before the move to control credit for real estate loans to limit speculative behavior, the current buying demand prioritizes products that serve real-life needs, have good liquidity and demand. high rental demand. While the high-end and luxury segments, purchasing power is clearly decreasing at this stage.

The supply of affordable apartments in Ho Chi Minh City is increasingly meager.

Phan Cong Chanh, a personal real estate expert, said that there are two segments: affordable houses located in suburban districts or located in satellite towns and suburban land, which will attract capital. much this year. These will be the segments that attract the cash flow of buyers because the real demand and investment are still very large.

Dr. Su Ngoc Khuong, Senior Director of Savills Vietnam also said that, normally, if there is inflation, gold and real estate will be a safe haven. Currently, the demand for affordable housing in urban areas such as Ho Chi Minh City and Hanoi is still very large. In the context that the supply continues to drip and the selling price is constantly increasing, projects that meet real demand will be sought. This expert said that the price of apartments at the threshold of 45-60 million VND/m2 in Ho Chi Minh City is still much sought by investors, because this is considered an acceptable price threshold at this stage compared to the ground level. price increase of HCMC during the past time.

Sharing the same view, Ms. Duong Thuy Dung - Senior Director of CBRE Vietnam said that the trend of increasing apartment prices will continue to develop in the future. Not only because of the limited land fund, the project development costs are escalating, but also because the demand for this type, especially in big cities, has only increased and not decreased. Recently launched projects, especially projects in the affordable segment, have a sales rate of over 80%. This is also the reason why investors tend to push the selling price higher.

“Mid-range apartments will definitely be the leading segment of the market, next to other segments such as land plots and houses attached to land. The supply of apartments is increasingly scarce, affordable apartments are more and more limited. The segment of low-cost and mid-range apartments will continue to attract great attention due to very high real demand, "emphasized Ms. Dung.

Apartment real estate prices are forecasted to continue to increase in the future in the context of scarce new supply and high demand in urban areas.

According to the latest report of the Vietnam Association of Realtors (VARS), the apartment market in Hanoi and Ho Chi Minh City is entering a price increase cycle and forming a new price level. The increased demand for apartments, along with the delayed supply, has caused apartment prices in Hanoi and Ho Chi Minh City to tend to increase in recent times.

According to this unit, the supply of apartments in the first quarter of 2022 recorded a decrease in Ho Chi Minh City. The supply of new apartments is estimated at nearly 2,200 units, down more than 60% compared to the same period in 2021.

VARS realizes that the apartment real estate market is forming a new price level when the supply continues to fail to keep up with the needs of investors and residents - especially in the increasingly obvious urbanization trend such as: Currently. Most of the upcoming projects in HCMC are located in districts far from the center, where the land bank is still abundant. The constantly improving infrastructure will continue to push the price level of these projects higher in the future.

According to a representative of JLL, the supply of new apartments in the market in the second half of the year is expected to be adjusted down compared to the forecast at the beginning of the year in the context that the State continues to strictly control the licensing of construction projects. new. The market grows more stable with the expected total new supply in 2022 to reach about 25,000 units with more than 55% of new sales.

“Selling prices are expected to increase but at a slower growth rate due to the move to strictly control credit risk in some potentially risky projects and the quantity of new supply is better than in the two years of the pandemic. recently”, emphasized JLL representative.

See more at: The Global City Apartment