The newly published Ho Chi Minh City real estate market report by Savills Vietnam shows that, in general, the Ho Chi Minh City apartment market in 2024 ended with some positive signals, opening up a positive start for the 2025 period.
Mr. Troy Griffiths, Deputy General Director, Savills Vietnam, assessed: Supply and market sentiment have improved, but selling prices remain high. Demand continues to shift to neighboring provinces with more affordable prices and invested infrastructure for development".
Accordingly, the supply of primary apartments will reach about 6,500 units in the fourth quarter of 2024, up 35% quarter-on-quarter but down 13% year-on-year. The new supply includes more than 2,700 units, up 243% quarter-on-quarter but still less than 3% year-on-year. In 2024, primary supply will increase by 10% year-on-year to nearly 11,900 units. Affordable housing is still scarce.
The supply of new Class C apartments has decreased sharply by 45% per year from 2020 to about 1,300 units in 2024, the lowest level in the decade. Primary supply at prices below VND50 million/m2 of wateryear has decreased by 20% year-on-year, accounting for only 15% of the total primary supply.
In particular, the sales volume in the fourth quarter of 2024 reached 2,700 transactions, up 43% quarter-on-quarter but down 10% year-on-year. The absorption rate reached 42%, up 2 percentage points quarter-on-quarter and 1 percentage point year-on-year.
High-end apartment transactions priced at over VND80 million/m2 above the water level increased by 561% quarter-on-quarter and 2,118% year-on-year, accounting for 76% of total transactions. The average price reached 91 million VND/m2 of irrigation works, up 36% quarterly and 40% annually, due to high new supply and existing projects increasing selling prices.
In 2024, sales increased by 29% year-on-year to 8,000 transactions, led by B-class apartments. Class B accounted for the highest proportion at 67%, followed by Class C with 28% and Class A with 5%.
Ms. Giang Huynh, Director of Research and S22M, Savills HCMC, said that the real estate market in HCMC is currently lacking land funds and project development costs are high. This forces investors to choose product segments to ensure minimum profits. Especially if the land fund is located in a strategic location and near the center, the investor will prioritize choosing the mid-range high-end segment to optimize financial problems. Supply and demand factors also have a significant impact. Limited supply pushes up the selling price of high-end products.
"The Ho Chi Minh City market will still focus on the mid-range and high-end segments in the short term. If buyers want to find affordable products, they need to move to areas further away from the center. Market balance can only be established when supply is unblocked. This requires more land funds in the inner city and suburban areas. However, in the short term, Ho Chi Minh City will still be a market for the mid-range and high-end segments, the expert emphasized.
In 2024, apartments priced lower or equal to VND50 million/m2 of waterproof only account for 18% of total sales, a sharp decrease compared to 2020 when this segment accounted for nearly 50% of sales. Transaction volume has also decreased significantly by 39% per year since 2020.
The scarcity of affordable apartments has forced buyers with limited budgets to go to neighboring markets such as Binh Duong, Dong Nai and Long An, where apartment prices range from only 30-40 million VND/m2 to get a good water supply. The shift in demand has boosted the number of Binh Duong apartment transactions to grow significantly, more than 200% per year, Ms. Giang Huynh cited.
By 2025, more than 10,000 apartments are expected to be opened for sale, of which class B accounts for 54% of the total number of apartments. By 2027, the future supply will reach about 46,000 apartments from 69 projects. Thu Duc City is expected to account for 52%, Binh Tan will account for 11% and District 7 will account for 10%.
