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HCMC apartment supply thinnest in six years

By Trung Tin   January 16, 2022 | 08:17 pm PT
HCMC apartment supply thinnest in six years
There are many apartment blocks in HCMC’s eastern area. Photo by VnExpress/Quynh Tran
The HCMC property market saw apartment supply drop to its lowest in six years, 14,339, last year, after declining by 22 percent from 2020, CBRE Vietnam said.

In a note, it blamed this on tardy licensing of developments in the last few years and the severe impact of Covid-19 restrictions 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.

There was not a single affordable apartment built for a second year in a row.

The city’s eastern part became a high-priced housing hub with the launch of eight luxury and high-end projects that accounted for 52 percent of the supply, followed by the western and southern areas with 22 percent and 17 percent at one development each.

CBRE has added the super-luxury segment in which the primary price is US$12,000 per square meter or more, and the first of its kind made an appearance with a price tag of over $15,000.

HCMC would soon have more super-luxury projects, it said.

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.

Duong Thuy Dung, senior director at CBRE, said new developments are increasingly coming with new features such as advanced technologies and staycation (vacations within the city) requirements.

She said more people in Generations Y (born between 1981 and 1996) and Z (born between 1997 and 2012) are becoming interested in apartments in big cities like HCMC and would become the main consumers in future.

 
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