HCMC Apartment Supply Lowest After 6 Years

The HCMC property market saw apartment supply drop to its lowest in six years, which fell to 14,339 last year after a 22% drop from 2020, CBRE Vietnam said that. They attribute this to the slow licensing of development projects over the years and the severe impact of the Covid-19 in the second and third quarters.

High-end apartments led supply last year, accounting for 59 percent, while mid-priced and luxury apartments made up 30 percent and 10 percent. Apartments in the affordable segment continued to have no supply for the second year in a row.

CBRE has added the ultra-luxury segment with primary prices of $12,000/m2 and up, and the first segment of its kind appears with prices above $15,000/m2. HCMC would soon have more super luxury projects.

In 2021 the average selling price in the primary market increased by 6.9 percent to $2,306 per square meter thanks to the big supply in the higher-priced segments. Except for the luxury segment, the others saw a slight increase in prices. Mid-priced apartments recorded the biggest hike of 4.2 percent, while the high-end and affordable segments increased by around 2 percent.

Rural districts such as Binh Tan, Binh Chanh and Thu Duc, where usually mid-priced apartments are built, last year had more high-end apartments. In the luxury segment, new sales increased in non-central business district areas like An Phu, Thao Dien, and Thanh My Loi wards in Thu Duc City but prices were lower than in traditional areas such as Thu Thiem and District 1, causing prices to drop by 4.4 percent. At the end of the fourth quarter, many developers started accepting reservations for sales in early 2022, and so primary selling prices are expected to keep rising.

In the next 12 months, nearly 22,000 new apartments in ongoing projects are expected to hit the market. Limited land availability, falling supply and high prices in the inner city are causing the housing market to shift to neighboring provinces like Binh Duong, Dong Nai and Long An.

Ms. Duong Thuy Dung, Senior Director at CBRE, said that many new apartments are increasingly developing with new features such as advanced technology and the requirements of home resort. She added that apartments in big cities like Ho Chi Minh City are attracting a lot of interest from Generation Y (born from 1981 to 1996) and Z (born from 1997 to 2012). These two generations promise to become the main cunsumers in the future.