The 2024 real estate market overview report, recently released by Savills Vietnam, shows that in the last 3 months of 2024, the apartment segment in Ho Chi Minh City set a new record price, averaging VND91 million/m2 (excluding taxes and fees), up 36% quarterly and 33% annually.
Savills explained that this sudden price increase was due to the fact that most of the new supply offered for the first time (2,700 units) in the last quarter belonged to the high-end segment, with prices above VND80 million/m2. The basket of products launched in the next phase from existing projects (3,800 units) also had an upward adjustment, averaging VND75-450 million/m2.
Also according to Savills, in 2024, Ho Chi Minh City will have a total of 12,000 primary apartments for sale (investors open for sale), 80% of which are priced above VND75 million/m2. As for affordable apartments (priced under VND65 million), which play an important role in regulating the price level for the market, there will be only 1,300 apartments for sale, the lowest level recorded in the past decade. The affordable apartment segment (priced under VND50 million) alone accounts for less than 15% of the primary supply.
Mr. Troy Griffiths, Deputy General Director of Savills Vietnam, said that both supply and market sentiment will improve in the fourth quarter of 2024, but selling prices will remain high. Demand will continue to shift to neighboring provinces with more affordable prices and infrastructure investment.
Looking at the supply situation this year, experts from Savills said that the high-end segment almost monopolized the real estate market in Ho Chi Minh City last year. This trend is expected to continue this year. It is expected that there will be about 10,000 apartments for sale this year, more than 80% of which are being priced at VND75 million/m2, excluding taxes and fees. The affordable housing segment will continue to be scarce, with only 2,000 units, accounting for 20% of the year's sales basket. Although positioned as affordable, most of the above apartments are expected to cost from VND50-65 million/m2.
According to Savills experts, one of the factors that will make investors in Ho Chi Minh City still prioritize the development of high-end types, besides the financial and profit problems, is that the demand for this segment is still very positive. Of the 2,800 apartments successfully offered for sale in the fourth quarter, more than 76% were priced at over VND80 million/m2, a 5.6-fold increase compared to the previous quarter and 21-fold compared to the same period in 2023.
In 2025, the Vietnam Association of Realtors (VARS) forecasts that new apartment prices will continue to be high. In addition, supply will still largely come from suburban metropolises. Most of the products will be in the high-end and luxury segments. This means that the supply of the affordable segment can currently only rely on social housing.
Many people believe that if prices are allowed to increase freely as they are now, it will be very difficult for workers to find housing. Now it is very difficult for workers to find housing at around 50 million VND/m2. Even old apartment buildings and old collective housing areas have increased in price by 1.5 - 2 times compared to before. However, real estate businesses also complain that it is difficult to reduce prices.
The director of a real estate company confided that, more than anyone else, businesses themselves want to sell at low prices to take advantage of product consumption, but cannot do so. Even in the most difficult market times, prices still increase because input costs such as land purchase, construction costs, and financial costs are always increasing and staying high. Finding a suitable land fund to develop a project is currently extremely difficult. Areas near Ho Chi Minh City no longer have land funds and have to go further and further away, and the procedures to complete the project take many years with a series of costs constantly increasing.
