Ho Chi Minh City and surrounding provinces had 72 apartment projects open for sale last year with 26,681 units in new supply, an increase of 22% compared to 2021, according to real estate consultancy DKRA Vietnam.
The Greater HCMC Region’s 2022 total consumption was 20,713 units, or 78% of the new supply, an increase of 19 percentage points against 2021, the firm said.
HCMC’s highest primary selling price was up to VND440 million ($18.780) per square meter, while the lowest was VND38 million ($1,620) per square meter, under one-tenth of the highest.
The two ends in Binh Duong province were VND60 million ($1,560) and VND17.3 million ($740); and those in Ba Ria-Vung Tau were VN47.8 million ($2,040) and VND32 million ($1,370).
New supply in HCMC and neighboring provinces recorded an increase of 22% compared to 2021 but is still at a low level compared to the period of 2019 and earlier.
In terms of last year’s new supply, HCMC was the leader with 64.8% of the total, followed by Binh Duong (31.4%), Dong Nai (1.9%), Ba Ria-Vung Tau (1.2%), and Long An (0.7%).
Grade A and B apartments took the largest parts in segments in the region, with 48.4% and 29.8%, respectively.
HCMC’s Grade A segment accounted for 74.8% of the city’s total supply, with a majority in the eastern area. Binh Duong provided mostly Grade B and C apartments, mainly in the towns of Thuan An, Di An, along National Highway 13, together with Ben Cat and Tan Uyen districts.
According to DKRA, overall market demand was at a low level, declining in the second half of 2022 due to the government’s tightened credit policy, and limited access to capital for both developers and buyers. Popular consumption rates at many newly introduced projects were 30-65%.
In this context, some developers offered a discount rate of up to 40% to buyers who accepted a shorter payment period.
Affordable apartments in real need
The Grade C segment, which means affordable apartments, saw some slight price increases last year due to real demand.
According to DKRA, last year’s average secondary selling price in the Grade C segment was VND27.8 million ($1,190) per square meter, an increase of 30.5% compared to 2018, meaning an average annual increase of 6.1%.
Apartments priced in the VND1.2-1.5 billion ($51,200 - 64,000) range in areas on HCMC’s outskirts were the most searched for.
The market has not seen new supply for this segment since mid-2019. Therefore, liquidity in the segment remains. Experts forecast demand for such affordable flats would continue to rally.
HCMC’s East leads apartment supply
The East of HCMC is a gateway connecting the metropolitan areas with surrounding provinces, especially the HCMC-Binh Duong-Dong Nai triangle. It is a fast-developing area in both socio-economic development and traffic connectivity. Thu Duc city, the area’s core, is an innovative and integrated urban area of HCMC, making real estate development in Thu Duc hotter and hotter.
According to DKRA, the East area’s 2022 new supply of apartments was around 76% of HCMC’s, much higher than just 28% in 2017. Its contributions in the years to come are forecast at 60-75%.