The real estate market is still in short supply after a long period of stagnation. After a record low in 2023, the supply of newly opened apartments this year will only reach about 35,000 units by the end of the fourth quarter of 2024.
Data from market research firm One Housing also shows that this year, the city is expected to have only 3 new projects starting construction: Diamond Valley Van Phuc (Thu Duc City), Vinhomes Green Paradise 2,870 hectares in Can Gio and Vinhomes International University Town about 880 hectares (Hoc Mon). Of the total 10,000 housing products expected to be launched for sale, the majority are still from the next phase of existing projects and a series of old projects restarted after many years of being shelved.
Avison Young Vietnam said that in 2025, Ho Chi Minh City will have about 15-17 projects for sale, of which nearly 70% are existing projects implementing the next phase and old projects restarting. Nearly 80% of products launched this year are in the high-end segment, priced from 60 million VND per square meter or more. This causes a large imbalance between supply and demand in the whole market.
Through an exchange with a representative of an investor of a mid-range housing project in Nha Be district, Ho Chi Minh City, this person said that in almost 2024, the enterprise could not do anything other than worry about cash flow to maintain operations and sell assets to restructure.
"The implementation of the business plan for the new project has almost come to a standstill, partly because of the difficult market and partly because the project products are stuck in legal problems that have not been resolved. Entering 2025, the business can only continue to sell old products in stock in the hope of improving cash flow. As for the implementation of the new project, the plan has to be put on hold because in reality, the legal settlement has not been able to be faster," said this investor.
Looking around the Ho Chi Minh City market, it can be seen that real estate businesses in their 2025 plans are still focusing on prioritizing legal issues and completing implemented projects to meet delivery deadlines.
New supply also comes only from previously implemented projects. It is not surprising that most investors do not have plans to implement new projects in Ho Chi Minh City when the legal story is still a barrier, preventing the city's housing supply from recovering as expected.
Analysts from the Investment Consulting and Asset Management Joint Stock Company (FDIT) believe that there will be differentiation in the real estate segment in 2025. The segment serving real and valuable housing needs such as apartments, townhouses, and land in residential areas will attract cash flow as well as the interest of individual investors. Speculative real estate such as project land in the provinces, agricultural land, and resort real estate will still not be able to recover and flourish in 2025 because investor sentiment after the difficult period of the real estate market in the period of 2022 - 2023 has not yet returned, seeking profits in this segment.
According to VIS Rating experts, new housing supply will improve in 2025 and will still be biased towards the high-end segment. Weak cash flow is the main weakness in the credit profile of investors in Vietnam, when about 70% of businesses that VIS Rating monitors have weak operating cash flow to pay off debt.
“We expect this index to improve in 2025 as sales cash flow improves, led by major developers with strong sales plans in major cities. We expect sales revenue to increase by 25-50% in 2025, mainly from high-end projects with high profit margins,” VIS Rating commented.
