High-end segment to continue driving HCM City apartment market, affordable units scarce

HCM CITY — The luxury and mid-priced apartment segments will continue to lead the market in  二0 二 二, while affordable apartments will remain scarce, according to property consultant DKRA Vietnam Joint Stock Company.

According to the company’s report on the housing market in HCM City and surrounding provinces in  二0 二 一, there were  四 一 apartment projects with about  二 一, 一 三 八 units, mostly in HCM City and Bình Dương Province, entering the market.

They sold  一 七, 一 二 二 units. 

In HCM City, supply and demand decreased sharply from  二0 二0 and fell to the lowest levels since  二0 一 五.

Luxury apartments in the city reached new price levels of nearly VNĐ 四00 million (US$ 一 七, 五 五 五) per square metre.

According to another real estate service provider Cushman Wakefield,  二 五,000- 三0,000 new apartments are expected to enter the market in HCM City this year, mostly in the luxury and high-end segments.

The supply would mostly be in the new Thủ Đức City, and online sales channels would remain popular.

The average selling price of luxury and high-end apartments topped VNĐ 一 四 三. 六 million (US$ 六, 二 六 六) per square metre in the fourth quarter of  二0 二 一, up  二 三 per cent year-on-year. 

Mid-range apartments cost VNĐ 五 六. 七 million ($ 二, 四 七 四) and affordable units cost VNĐ 四0. 九 million ($ 一, 七 八 五), up  一 五 per cent and  二 六 per cent year-on-year. 

The total number of new and old apartments sold last quarter was nearly  三,000, with mid-range apartments accounting for  八 二 per cent and high-end ones for  一 一 per cent, according to Cushman Wakefield.

No new affordable project was sold.

High-end apartments are those in prime locations and costing above $ 三,000, mid-range apartments are in convenient locations and cost $ 一, 八00 –  三,000, and the affordable segment sells at below $ 一, 八00.

Prices to drop after developer pulls out of expensive land deal 

Following property developer Tân Hoàng Minh Group’s decision to pull out of a deal to buy a  一0,0 六0sq.m land lot in the Thủ Thiêm new urban area at VNĐ 二. 四 五 billion ($ 一0 八,000) per square metre, some analysts expect the market to cool down.

In December the Việt Star Real Estate Investment Co., Ltd, a subsidiary of Tân Hoàng Minh won a bid to buy land lot  三- 一 二 for VNĐ 二 四. 五 trillion ($ 一.0 七 billion) beating off CapitaLand One Financial, a foreign developer.

It was the highest ever paid for a square metre of land anywhere in the country and  八. 三 times the reserve price.

Economist Dr Đinh Thế Hiển said the cancellation of the contract would cool the market down, disappointing many small investors who had expected prices to track the “shockingly high” price.

Prof Dr Đinh Trọng Thịnh, also an economist, said prices in the Thủ Thiêm new urban area would subside.

Dr Vũ Đình Ánh, another economist, said the increase in land prices following the auction last month did not reflect the market. 

Speculators pushed up prices by using dubious information and transactions like this one, he said.

Thân Thành Vũ, permanent vice president and general secretary of the Vietnam Tourism Real Estate Association, said: “The fact is that the market is still frozen with few or no transactions. The Tân Hoàng Minh incident would make the situation worse.

“A freezing market is dangerous.” — VNS