Demand continues to "reverse" towards apartments
Compared to land or townhouses - villas, apartments continue to be the segment that creates momentum for recovery for the HCMC market in the last months of 2024.
According to data from Batdongsan.com.vn in the third quarter of 2024, thanks to the rapid population growth in Ho Chi Minh City, supply continues to be scarce, and very few projects will start construction by the end of this year, boosting demand for apartment ownership.
In the context of the market not fully recovered, bank interest rates remain low, this is an opportunity for buyers to take advantage of projects launched at the end of the year with reasonable prices and good sales policies. Accordingly, many people decide to buy houses, taking advantage of the opportunity to make a profit at this time. They are prepared for the possibility that real estate prices may increase rapidly after the new land price list of Ho Chi Minh City is issued and the new laws come into effect.
It is noted that in Ho Chi Minh City, apart from a number of projects opening for sale in the next phase, very few new supplies are launched at the end of the year. Currently, in the South of Ho Chi Minh City, there is the green-health apartment project Essensia Sky by Phu Long, a rare primary supply with standard legal documents that has started construction. In the context of the market not yet recovering, the fact that this investor has brought the project to the market shows its financial potential, expecting to catch the wave of demand at the end of the year. It is expected that in early November 2024, this project will be launched on the market with an attractive sales policy.
Or in the East, the FIATO Uptown project of Thang Long Real Group located right on the frontage of To Ngoc Van Street, Thu Duc District (old, now Thu Duc City) is also a rare primary supply in this area with reasonable prices, attracting buyers' attention.
The project is located in the residential area of Thang Long Home - Hung Phu 9.2ha, has been handed over the certificate and 90% of residents have moved in. The advantage of the project is that it is close to the Ho Chi Minh City Ring Road 2, which is about to start construction on the closed section through the East area, along with existing community facilities in the area. The value of the project is expected to increase sharply when the infrastructure is completed.
According to Mr. Vo Huynh Tuan Kiet - Director of Housing CBRE Vietnam, the supply of housing in Ho Chi Minh City will continue to be small until the end of the year. However, the bright spot is the growing demand. Apartment projects in Ho Chi Minh City in the price range of 50-60 million VND/m2 are increasingly scarce. In the context of increasing real housing demand, these projects have an advantage.
This person emphasized that the opportunities of the HCMC housing market still lean towards real demand. Meanwhile, the investor group tends to buy apartments to rent or wait for long-term price increases. The psychology of buyers is still looking for a stable channel to keep money, which is real estate, after the complicated developments of other investment channels.
“The third quarter of 2024 is the decisive quarter for the new phase of the real estate market. The fourth quarter is considered the peak of the market. Around the first and second quarters of 2025, the supply of apartments in Ho Chi Minh City is expected to be better, booking activities and project implementation will be bustling again after a long period of being “compressed”. Currently, investors and real buyers are bustling back to the market, showing gradually positive signs,” Mr. Kiet emphasized.
There is no reason for primary apartments to fall in price.
CBRE Vietnam representative analyzed that in the context of supply shortage, new projects have difficulty in solving legal issues, investment costs, loan opportunities, investors' price expectations... are all increasing. Therefore, there is no reason for primary apartments in Ho Chi Minh City to decrease in price. Perhaps, in the context of the market not really improving, it is an opportunity for "quick" buyers to take the lead because most of the projects offered at this stage are adjusted to suit the actual market situation. In the coming time, the price level will certainly change.
Currently, Ho Chi Minh City is urgently directing the adjustment of land price lists and promulgation before October 20. After the new land prices are promulgated and the Circulars and instructions on the Law are widely applied, land costs are expected to increase. This will lead to an increase in real estate prices. Especially in the apartment segment, it will be greatly affected in terms of legal corridors, initial land processing costs and capital mobilization costs. Therefore, the increase in primary prices of new projects will lead to an increase in secondary prices of projects that have been implemented or handed over. This is the reason why real estate prices may change from the beginning of 2025.
According to Ms. Pham Ngoc Thien Thanh, Head of Research and Consulting at CBRE in Ho Chi Minh City, the primary apartment market has never seen a downward trend. In the secondary market, there is a decrease in prices, but it is localized and does not represent the entire apartment market. Some projects that have been suspended for 2-3 years will be sold on the market with a 10-30% increase compared to the previous valuation. This shows the expectations from investors as well as the increased input costs creating a new price level for the market.
Sharing the same view, a representative of the Vietnam Real Estate Brokers Association said that primary selling prices continue to increase because supply, although improved, is still difficult to meet demand. Most of the new supply on the market today is completed at a high standard with high investment costs, especially costs related to land. Therefore, primary real estate prices will continue to increase.
