HCMC apartments draw level with single-family house prices

An 85-square-meter unit at The Metropole in the eastern ward of An Khanh, is being sold at VND130-180 million (US$4,925-6,820) per square meter. An 80-square-meter private house with one ground floor and two upper stories in nearby Thao Dien Ward only costs VND150 million per square meter.

Apartment buildings in east HCMC. Photo by VnExpress/Quynh Tran

Other nearby apartments such as The Privé, Eaton Park and Lumière Midtown are selling at VND130–250 million, higher than the VND110–200 million range of landed houses within a two-kilometer radius.

In several other parts of the city too newly launched apartments are priced similarly as townhouses.

Listings on real estate platform Batdongsan shows that in the second quarter the prices of private houses in Vietnam’s biggest metropolis ranged from VND87 million to VND200 million per square meter.

Apartments only cost slightly lower at VND68-200 million.

Apartment prices have been growing faster than those of houses.

In the first eight months of the year the prices of private houses in the city’s east increased by 8–20% while those if apartments rose by 18–40%, Batdongsan said.

In the south, private house prices only rose by 10% as against 35% by apartments.

Data from property consultancy CBRE confirms the trend.

In the second quarter single-family houses cost VND160–300 million per square meter, an increase of 9% while apartment prices shot up by 29% to VND82–220 million per square meter, it said.

A report by the Ministry of Construction said private houses cost VND110–305 million per square meter (up 2–5%) in the second quarter, while the average apartment price reached VND89 million per square meter, a 39% increase.

Commenting on the soaring apartment prices, Tran Khanh Quang, CEO of property developer Viet An Hoa Real Estate Company, said single-family houses used to have the upper hand due to the long-term ownership rights they fetched and potential for greater appreciation due to the attached land, but that is changing because of high prices, scarce supply and restricted credit policies.

Apartments are in high demand because of growing housing needs, he said, adding that the sharp increase in prices reflects consumers’ preference shift, developers’ marketing strategies and brand positioning.

Real estate analyst Le Quoc Kien said a single-family home often used to cost double an apartment’s price, thanks to the land and minimal depreciation, while apartments were once considered a "deteriorating asset."

But now townhouses in narrow alleys with poor infrastructure are no longer a popular choice, and their commercial value has gradually declined, while apartments with integrated amenities are increasingly attractive to young buyers both as residence and investment.

Vo Hong Thang, deputy CEO of property service firm DKRA Group, said apartment prices surpassing that of townhouses is not entirely unusual, but the imbalance is also due to the skew in supply of apartments toward mid- and high-priced segments dominate with affordable housing nearly disappearing.

Apartment prices are rising too rapidly, with each new project priced higher than the previous one, he said, adding "At this rate, apartments could completely surpass townhouses in terms of prices."