A report by the Ho Chi Minh City Department of Construction shows that by the end of May, the city had 20 commercial housing projects eligible for capital mobilization with housing formed in the future, providing about 16,328 units with a total floor area of more than 1.63 million m2. Among these, the high-end segment accounted for 14,637 units, equivalent to nearly 90% of the total supply. The mid-range segment had 1,691 units, while affordable housing did not record any new projects.
Currently, Ho Chi Minh City has 96 housing projects under implementation with a scale of more than 95,400 units, including about 87,200 apartments and more than 8,100 low-rise houses. Most of the projects being and about to be implemented are positioned in the mid- and high-end segments.
The above developments show that the real estate market in Ho Chi Minh City is recovering in terms of supply, but the product structure is still unbalanced. Most new projects are concentrated in the mid- and high-end segments, while the segment that meets the actual housing needs of the majority of people is increasingly scarce.
This has caused the market's consumption to decline sharply. Surveys from market research units all agree that market absorption has decreased significantly, in which some segments such as apartments and townhouses in the suburban area of Ho Chi Minh City decreased by 40-50% compared to the same period last year and this downward trend is forecast not to stop.
Notably, apartments are a segment that mostly meets real housing needs and has "seized the wave" of the market for a long time, but is currently a segment with a sharp decline in liquidity.
Mr. Vo Hong Thang, Deputy General Director of DKRA Consulting, said that key segments such as apartments and townhouses in the Southern region after Tet have recorded purchasing power of only 20-30% compared to the end of last year. The number of customers placing orders at many projects has decreased by half, while the number of deposit contracts not converted into official transactions is increasing due to buyers changing their decisions.
And segments that do not meet this demand such as land plots in suburban areas, land plots in areas far from the center are almost'frozen' in this period.
According to DKRA Consulting, the number of successful transactions in the land plot market in the first half of the year is only equivalent to 3-5% of the total primary supply, down about half compared to the same period last year. In the villa and townhouse segment, the consumption rate also only reached about 4%. Surveys from some brokerage units in Ho Chi Minh City and neighboring provinces show that the number of land plot transactions also decreased significantly compared to the same period last year.
According to experts' analysis, the root cause of the market's sluggishness is financial pressure weighing heavily on homebuyers as interest rates rise, pushing monthly debt burden costs up, causing speculative cash flow to almost disappear from the market.
Market liquidity is forecast to be unlikely to break through strongly in the near future when home loan interest rates are still maintained around the threshold of around 10%. The current interest rate level is only enough to help buyers' psychology be more stable than at the beginning of the year, but not attractive enough to activate a new investment wave.
Meanwhile, the general level of house prices is also difficult to decrease deeply due to project development costs, loan interest rates and construction material prices remaining high. A report by Avison Young Vietnam shows that apartment prices in Hanoi and Ho Chi Minh City in the past 5 years have increased by 72% and 50% respectively, while average income has only increased by 6-10% per year. By the end of 2025, house prices in Vietnam have been equivalent to about 20 times the average annual income of people.
While house prices are rising rapidly, affordable housing supply has almost disappeared from the primary market. Most products launched in the last 2 years belong to the high-end and luxury segments. This has widened the gap between affordability and house prices. The consequence is that real housing demand is still very large, but increasingly difficult to convert into transactions.
The current context shows that the real estate market is currently facing many major challenges related to supply and demand, product structure and liquidity is an unknown for many businesses that are and are preparing to open for sale projects in the near future.
