HCMC 'affordable' apartment prices soar 3-fold in 6 years

A VnExpress survey in March found that new low-end apartments in the city’s eastern, southern and western areas have reached the VND50-million mark, which puts them out of reach of most of the middle class.

Fiato Premier in Thu Duc City (formerly Thu Duc District) announced a starting price of VND49 million per square meter, while Akari City in Binh Tan costs VND47-49 million.

Prices in the south are a little lower at, for instance, VND46 million at West Gate Park in Binh Chanh.

The suburban areas were once considered the hub of affordable housing, but condo prices there have surged past VND2 billion, making them unaffordable even for the middle class.

A bird's eye view of residential areas in HCMC's Thu Duc City. Photo by VnExpress/Quynh Tran

In 2016, housing agencies categorized a residential property costing under VND20 million per square meter in HCMC as grade C, raised it to VND25-30 million between 2017 and 2020 and to above 35 million last year.

But even this no longer fits the bill since affordable housing prices have jumped to around VND50 million this year, or thrice the rates just six years ago.

In the final quarter of last year, Savills Vietnam said the prices of grade C apartments in HCMC had risen by 27 percent since 2020 to VND56.5 million.

The 2021 report of the HCMC Real Estate Association (HoREA) said apartments costing less than VND25 million per square meter, its own categorization of ‘affordable’ segment, are no longer available.

Prices of new apartments in suburban areas cost nothing less than VND40 million, which is close to HoREA’s ‘high-end’ segment.

It warned such a supply-demand mismatch is creating market distortions but they are unlikely to be corrected soon since developers continue to focus on the higher-end segments.