Southern Vietnam property market faces liquidity challenges: DKRA

Real estate sales in Ho Chi Minh City and the surrounding areas faced challenges in the first two months of 2025, mainly due to high prices and the nine-day Lunar New Year holiday.

A report by property consultancy DKRA Group on the HCMC and neighboring areas' real estate market for January and February revealed that most segments experienced low absorption rates compared to total supply.

The apartment segment remained a bright spot, with 113 projects available for sale, most of which were launched earlier, offering a total of 12,066 units, down 2.8% compared to the same period in 2024.

The absorption rate stood at 10%, equivalent to 1,188 units, marking a 6.2% year-on-year increase. However, compared to the first two months of 2021 and 2022, sales from 2023 to 2025 showed a significant decline, indicating slower absorption.

Vo Hong Thang, director of consulting & project development at DKRA Group, explained that the primary supply in the first two months of this year was lower than the previous year, mainly due to the new supply launched in January before the Lunar New Year holiday, which was predominantly concentrated in HCMC and Binh Duong.

Market liquidity did not see significant breakthroughs, with the high-end apartment segment (Grade A) making up 76% of the primary supply in HCMC. Meanwhile, Grade B and C apartments dominated the supply in neighboring provinces.

"Discount policies for quick payments, extended payment deadlines, and promotional gifts continued to be widely used by most developers to stimulate the real estate market. Prices in both the primary and secondary markets remained relatively stable. However, liquidity in the secondary market slowed compared to the end of last year, partly due to the long Lunar New Year holiday (January 25 to February 2)," Thang said.

Regarding primary prices, HCMC recorded very high prices, with the lowest at VND37 million ($1,453) per square meter and the highest reaching up to VND493 million ($19,360). In contrast, localities like Binh Duong, Long An, and Dong Nai had significantly lower prices.

Sales of townhouses and villas hit only 1% of supply

The townhouse and villa segment performed more poorly, with sales in the first two months of the year almost "bottoming out," reaching only 1%, or 75 units out of a total supply of 5,009 units from 81 projects.

However, compared to the same period last year, both supply and absorption rose by 4% and 7%, respectively.

Thang assessed that new supply remained scarce, with no significant signs of short-term recovery. Dong Nai and HCMC continued to be the main sources of primary supply.

"Overall, market demand remained low, with prices staying high due to input costs. Developers widely applied discount policies and sales incentives to boost liquidity," he said.

Thang also mentioned that the real estate market is recovering more slowly than expected, partly due to investors' wait-and-see approach. Additionally, delays in project licensing continue to put pressure on businesses and new supply.

Notably, many property companies are currently facing capital challenges, especially those with high bond debt. Corporate bonds have been extended or postponed for payment over the past two years under the government’s Decree 08/2023.

By August 2025, corporate bond maturities could reach approximately VND180 trillion ($7.07 billion), creating significant pressure on issuers to meet their obligations to investors.

Meanwhile, Giang Huynh, an expert at Savills Vietnam, believed that most of the apartments being launched are from the mid-range and higher segments, which means market conditions are not promising. The lack of supply, high prices, and new projects with higher prices than before have affected both buyers and absorption rates.

This year, the supply of apartments in HCMC is expected to gradually improve. However, the supply structure will continue to focus on mid-range and higher segments, with a continued shortage of affordable housing.

As available land in central areas becomes increasingly scarce, satellite markets surrounding HCMC will become key areas to meet housing demand.

For the townhouse and villa segment, over 700 units are expected to be launched in 2025, with products priced above VND20 billion ($78,540) accounting for 70%. HCMC will remain the focus of the high-end segment, while areas like Dong Nai, Binh Duong, and Long An will offer more affordable options, she added.