Saigon's housing market hits highest sales since 2011 bubble crisis

Ho Chi Minh City saw a strong performance in the apartment business in the second quarter this year, thanks largely to the affordable segment.

Apartment transactions between April and June increased 33 percent from the first quarter of the year, and by 67 percent from the same period last year, with 11,600 units sold, according to figures from real estate consultancy firm Savills.

The number was the highest since 2011, the year of the city's housing crisis.

The affordable housing segment accounted for 64 percent of the sales, the company said in a report released on Monday.

While transaction volume in the top-tier dropped 32 percent on-year, sales of more affordable units costing less than VND30 million (VND1,320) a square meter surged a whopping 123 percent.

With 58,000 new households (families) formed in 2016, Ho Chi Minh City has the biggest real estate market in Southeast Asia, the company said, but in terms of affordability, it is among the worst in the region.

The market has for years focused on the high-end segment, where prices hit VND90 million (nearly $4,000) per square meter. That would mean it would take two working adults 20 years to pay for a 60 square meter apartment, based on the city’s average income in 2016.

Besides, many people in the megacity are migrants and low-income workers.

Savills research suggests that the market is changing and will continue in an affordable direction to catch first-time buyers.

Low-cost apartments are expected to occupy nearly half of the apartment market in the city this year, with a further 48,000 units to be launched by the year-end.