High-end apartments are forecast to continue their dominance of new supplies this year in Ho Chi Minh City, with up to 70-80% of the total, according to real estate consultancy DKRA Vietnam.
Property developers prefer the expensive products due to high cost of capital and building materials, together with the city’s smaller land reserves in urban areas, the HCMC-based firm said Tuesday in a new report.
According to DKRA, HCMC’s supply of new apartments has declined in recent years, from more than 41,000 units in 2017 to 17,000 last year, but the high-end segment has pushed up its ratio from 15% in 2017 to about 75% last year. This proportion will continue over the coming years, DKRA said.
A new trend in project development is investors’ increasing application of international green standards for buildings like LEED, EDGE, and Green Mark. They are also using better home appliances, higher-quality materials for furniture and inner decor, and offering longer payment timelines, the firm said.
Data from the HCMC Department of Construction shows that high-end apartments have witnessed high ratios of the total supply. The 25.5% rate in 2017 went up to 30% and 67% in 2018 and 2019, respectively, then down to 42% one year later, but soared to 72% in 2021. The 2022 ratio was 78.3% of the total supply.
According to Le Hoang Chau, chairman of the HCMC Ho Chi Minh City Real Estate Association, a gap exists between supply and demand as actual demand is in the affordable housing segment.
At present, HCMC has about 30 premium apartment projects with an average price for each square meter higher than VND100 million ($4,300), mainly in District 1 and areas on the other side of the Saigon River like Thao Dien, Thu Thiem, and An Phu. Some of the high-end projects are Zenity, D1 Mension, Soho Residence, The Grand Manhattan, Lancaster Legacy, IFC One Saigon, Pearl, Vinhomes Dong Khoi, Grand Marina Saigon, Vinhomes Golden River, and The Marq.