The price of apartments in Ho Chi Minh City surpasses that of townhouses, reaching 190 million VND per square meter

This unit’s first quarter market report shows that the primary selling price of apartments in the core area of ​​Ho Chi Minh City (excluding Binh Duong and Ba Ria – Vung Tau) reached nearly 7,300 USD (more than 190 million VND) per m2, an increase of 19% compared to the previous quarter and 53% compared to the same period last year.

This is the highest level ever, and higher than the primary price of townhouses of about 7,200 USD (188 million VND) per m2 recorded at the same time. In many suburban areas, the average price of primary townhouses is only about 90-120 million VND per m2, significantly lower than the average apartment price of the entire city.

According to Cushman&Wakefiled, the price increase mainly comes from the dominance of luxury and super-luxury projects in the East and South areas. In the first quarter of the year, the luxury segment accounted for about 72% of new supply, the rest belonged to the high-end group. Notable projects for sale include Masteri Cosmo Central, Masteri Park Place and Sunshine Sky City.

The continuous peak in selling prices, according to this unit, is creating great pressure on market liquidity. Last quarter, the core area of ​​Ho Chi Minh City had about 1,200 new apartments opened for sale, the transaction volume reached just over 800 units, equivalent to about 25% of primary supply, down 74% quarter-on-quarter and 31% year-on-year.

Similar price and liquidity developments were also recorded by other research units. According to Avison Young Vietnam, apartment prices in Ho Chi Minh City in the first quarter reached an average of nearly 122 million VND per m2, of which the high-end and luxury segments are popular at 250-400 million VND per m2. Meanwhile, the absorption of the apartment market only reached 35% of the offered basket.

Data from the Ministry of Construction also shows that apartment prices in the city fluctuate from 112-130 million VND per m2, while many high-end projects are offered for sale from 200-330 million VND per m2. Apartment purchasing power tended to decrease in the past quarter, largely because house prices are beyond the affordability of most real estate buyers.

According to Ms. Le Hoang Lan Nhu Ngoc, Senior Director of Cushman & Wakefield Vietnam Strategic Consulting Department, the Ho Chi Minh City apartment market is showing an increasingly clear mismatch between supply and demand. While the projects launched for sale are mainly in the high-end segment, actual demand is concentrated in the mid-range and affordable product group. In addition, rising home loan interest rates and more cautious credit policies also cause many customers to delay their decision to down payment.

Ms. Cao Thi Thanh Huong, Deputy Director of Savills Vietnam Market Research Department, said that the supply of new apartments in Ho Chi Minh City this year is expected to reach about 13,000 units. However, this number is still significantly lower than the actual demand of the market, which is estimated to be about 50,000 units per year considering population growth and urbanization.

“When supply is limited, in principle, selling prices will be difficult to reduce deeply, even when liquidity weakens,” Ms. Huong said.

In addition, according to experts, the supply shortage will not be resolved in the short term. Project development costs and increased interest rates will also cause higher financial pressure on businesses, while construction material prices tend to increase. These factors make widespread price reductions nearly impossible.

Escalating selling prices are creating a wave of shifting demand from the central area to satellite cities. According to Cushman&Wakefield, this trend is clearly reflected in trading developments in the Binh Duong and Ba Ria – Vung Tau markets in the past. In the first quarter, these two areas recorded more than 7,000 new apartments for sale, nearly 6 times higher than the supply in the city’s core area.

Liquidity also remained at a positive level with more than 6,100 successful transactions. Binh Duong alone recorded about 5,400 transactions, corresponding to an average absorption rate of nearly 77%, showing that real housing demand is still quite large.

One of the biggest advantages of satellite towns is that the price level is significantly lower than the center of Ho Chi Minh City. Cushman & Wakefield said the average price of primary apartments in Binh Duong and Ba Ria – Vung Tau is currently about 50 million VND per square meter, only a quarter of the price in the city’s core area.

The large price gap is creating significant attraction for both real buyers and long-term investors, especially in the context of the region’s interconnected infrastructure system continuously expanding. Ring routes, highways, metros and transportation projects connecting Ho Chi Minh City with Binh Duong, Dong Nai or Ba Ria – Vung Tau are helping to shorten travel time and increase the attractiveness of these areas.

In that context, the Ho Chi Minh City apartment market is forecast to continue to be strongly differentiated. The central area is likely to maintain high prices thanks to limited supply and the need to own real estate in prime locations. Satellite cities are forecast to play a role in meeting the housing needs of the majority of people, and at the same time become the main driving force to create liquidity for the market in the coming years.