Savills Vietnam's Ho Chi Minh City real estate market report shows that in the third quarter of 2024, primary supply decreased by 13% quarter-on-quarter and 36% year-on-year to 4,871 units. The decrease in supply was due to a decrease in inventory and no new projects being launched. Grade B accounted for the majority of supply with 60% of the market share, followed by Grade C with 38% and Grade A with 2%. The East (Thu Duc City) accounted for 58% of the market share, and the West (District 6, Binh Tan) accounted for 20%.
New supply of 799 units came from the next phases of 6 projects, down 30% quarter-on-quarter. Notably, 5 projects reopened for sale with 545 units, after legal issues were resolved.
The real estate market report for the third quarter of 2024 by the Ministry of Construction and a number of market research companies also shows that in some major provinces and cities such as Hanoi and Ho Chi Minh City, apartment prices continue to increase in both new and old projects, with the price level of new projects increasing by about 4-6% quarterly and 22-25% annually.
Explaining the reason for the recent increase in real estate prices, analysts said that a large part of it was due to the impact of a number of factors such as the increase in land-related costs, especially in some localities; affordable housing products are not in sufficient supply to meet market demand. This has caused apartment prices to increase, especially in some areas, increasing locally by about 35% to 40% depending on the location compared to the previous quarter.
In the market segment of affordable apartments (priced under 25 million VND/m2), there are almost no transactions and products for sale; mid-range apartments (priced from about 25 million VND/m2 to under 50 million VND/m2) still account for a high proportion of transactions and supply in the market, the remaining order is luxury and super luxury apartments (priced over 50 million VND/m2).
In addition, difficulties in project licensing continue to put pressure on businesses as well as new supply to the market. Typically, in the first 3 months of 2024 alone, Ho Chi Minh City recorded only 1 new project approved for investment policy.
In addition, the legal settlement in the past time has not had much clear progress, especially for projects with interspersed land. The Land Law, Housing Law, and Real Estate Business Law have been passed but there still need to be circulars and decrees to guide implementation to ensure effective implementation in practice.
Dr. Nguyen Duy Phuong, Investment Director of DG Capital, said that if the story of increasing real estate prices is not intervened soon, it will lead to many consequences for the market and for society. To solve this situation, the State needs to soon have support measures for affordable commercial housing projects and social housing. At the same time, the market really needs the participation and companionship of all subjects including State management agencies, professional social organizations, real estate enterprises and real estate brokers.
