Private houses and townhouses in Ho Chi Minh City have reduced prices because they are difficult to sell

After more than 5 months of selling a house in an alley in the Bay Hien area, Mr. Minh, a homeowner in Ho Chi Minh City, agreed to lower the price by more than half a billion VND to close the transaction. The house with an area of ​​nearly 40 m2 was expected to sell for more than 7.5 billion VND at the end of last year, but is now only successfully traded at about 6.9 billion VND after many rounds of negotiation.

“There were quite a few customers looking at the house, but most of them paid a price several hundred million dong lower than expected. If the price stays the same as before, it will be very difficult to sell,” Mr. Minh said.

However, not all transactions can be closed after price adjustment. The owner of an 85 square meter private house in An Hoi Dong ward said he had been selling this property since the middle of last year for 11 billion VND. Over the past year, the house received many visitors but could not be successfully traded because most buyers only accepted the price of 7-8 billion VND.

Under market pressure, the homeowner agreed to lower the asking price to 9.8 billion VND, and has still not found a suitable buyer. “I can reduce the price but I can’t sell it too much lower than the property value,” the homeowner said.

According to regional brokers, this situation is quite common in townhouses and high-value private houses. Sellers have begun to lower their asking prices as liquidity tends to slow and high-priced homes become harder to sell. However, the gap between the asking price and the buyer’s ability to pay is still quite far, causing the transaction time to last longer compared to the previous period.

Noted by VnExpress also shows that the asking price of private houses in Ho Chi Minh City is adjusting in many areas. In central and near-central districts such as districts 1, 3, 10, Binh Thanh, Phu Nhuan, Tan Binh (formerly)… the common decrease is about 3-8%, in some places it is up to more than 10%. Meanwhile, peri-urban and suburban areas such as Go Vap, Binh Chanh, Nha Be, District 12 or old District 9 recorded a stronger adjustment, commonly 5-12%.

The townhouse segment also had similar developments when the price level in the inner city area decreased by about 5-10%, while the peri-urban and suburban areas adjusted by about 6-8%, showing the trend of sellers lowering expected prices to increase transaction capacity in the context of cautious purchasing power.

Data from Batdongsan also shows that the downward trend in prices appeared clearer in the second quarter. The price of townhouses for sale in Ho Chi Minh City decreased from an average of 213 million VND per m2 to about 197 million VND per m2, equivalent to a decrease of nearly 8% compared to the end of last year. Private house prices also decreased by about 3.4%, from an average of 120 million VND per m2 to about 116 million VND.

Mr. Ha Quang Vy, a longtime townhouse broker in Ho Chi Minh City, said that the slowdown in liquidity in the entire real estate market is directly affecting the private house and townhouse segments. When transactions slow down, buyers no longer have the mentality to spend money as quickly as during the price fever period, but spend a lot of time surveying, comparing and negotiating before deciding.

According to Mr. Vy, this segment is more clearly affected because this is a group of assets with great value and depends heavily on equity capital. For houses priced from 7-10 billion VND or more, financial pressure becomes a major barrier in a context where credit is carefully controlled and capital costs remain high. This causes the need to use leverage to decrease sharply, leading to weaker demand.

Ms. Pham Ngoc Huyen, leader of a brokerage in Ho Chi Minh City, said the price of private houses and townhouses often depends more on the homeowner’s expectations and the regional valuation level than on a common standard. In recent years, this segment has increased in price rapidly thanks to the preference for assets attached to land and the price increase effect from apartments, causing the price level to gradually exceed the affordability of real buyers.

Besides, the exploitation efficiency of private houses and townhouses also decreased significantly. The rental yield is currently only around 2% per year, while operating costs, maintenance and vacancy risks are increasing. This makes the advantage of both living and doing business, which is the strong point of the townhouse type, no longer as attractive as before.

In terms of demand, Mr. Dinh Minh Tuan, Southern Regional Director of Batdongsan, said that the private house segment is strongly affected by changes in buyers’ housing choice behavior, especially young customer groups.

Previously, owning real estate in the inner city was considered the top goal, now buyers increasingly prioritize quality of life, financial balance and accompanying utility systems. With the same financial resources, many people are willing to choose apartments or houses in urban areas near the center with synchronous infrastructure, parking, green space and complete utility system instead of a house in a deep alley in the inner city. In addition, individual houses also face increasing competition from apartments and new urban areas.

However, experts assess that private houses and townhouses are still types of ownership with great advantages in terms of land value, limited supply and ability to accumulate long-term assets. In the context of increasingly scarce inner-city land funds and limited deployment of high-rise buildings, products with good locations, complete legalities, wide alleys, and high practical exploitation ability still maintain better liquidity than the general market. On the contrary, asset groups whose prices are too high compared to their use value will continue to be under pressure to adjust to approach the actual purchasing power of the market.