Since the beginning of the year, the price of new apartments in Ho Chi Minh City has continuously reached new peaks. One of the rare projects that has been opened for sale during this period is Eaton Park on Mai Chi Tho Street (Thu Duc City), invested by Gamuda Land Group.

The project was first offered to the market at a price of VND130 million/m2, which, if taxes and fees are included, will increase to VND146 - 155 million/m2. Although the price is higher than the average price in the area, the first sale recorded an absorption rate of nearly 90% of the product basket.

Similarly, at the Metropole Thu Thiem Project, if phase I is offered for sale by the investor at a price of about 160 million VND/m2, phase II is offered for sale at a price of 250 million VND/m2.

Data from DKRA Group shows that in the second quarter of 2024, the highest selling price of primary apartments in Ho Chi Minh City reached 493 million VND/m2. The emergence of a number of projects in the luxury and super luxury segments is causing the average apartment price to increase.

Apartment consumption is also very positive. According to DKRA Group, in the last quarter, primary consumption in the whole market reached 3,349 units, up 88% compared to the previous quarter and up 82% compared to the same period in 2023. Most transactions fell into projects with completed legal procedures, rapid construction progress, and convenient connections to the city center.

In a recent report, the Ministry of Construction recorded an average increase of 5-6.5% in apartment prices in the second quarter of 2024 and an increase of 25% compared to the same period last year. Apartment prices increased not only in newly opened projects, but also in many old apartments that have been used for many years.

Projects with strong secondary price increases in Ho Chi Minh City include the City Garden apartment project (Binh Thanh district) with an average sale price of VND85 million/m2, an increase of 18% compared to the same period last year; the Antonia project (District 7) and Masteri Thao Dien (Thu Duc city) increased by 11% and 10% respectively.

The Ministry of Construction also believes that apartment prices in Ho Chi Minh City may continue to increase in the coming time due to the scarce supply of new projects launched on the market.

Some neighboring localities have also recorded steady price increases since the beginning of the year. In Binh Duong, if 2 years ago, the announced price only fluctuated around 20 - 30 million VND/m2, recently it has increased to 45 - 50 million VND/m2.

For example, the Sycamore apartment project in Binh Duong New City, invested by Capital Land, has an expected average price of about 50 million VND/m2. Or the Uni Complex apartment project in Thu Dau Mot City, invested by TDC Company, although not officially announced, the price is also expected to be around this level.

In addition to the two projects above, previously announced projects such as Phu Dong Sky One; Phase II, Astral City project; Picity Sky Park... all have an average price of 35 - 45 million VND/m2.

Ms. Giang Huynh, Deputy Director and Head of Market Research and S22M (Savills Vietnam) assessed that the Ho Chi Minh City market currently has no products under 2 billion VND, 90% of transactions are in the 2 - 5 billion VND/apartment segment. However, in the period of 2024 - 2026, the number of apartments priced at 2 - 5 billion VND will become increasingly scarce, the supply will mainly be concentrated in the 5 - 10 billion VND/apartment segment.

According to experts, the market lacks supply while demand is very high, making it difficult for housing prices to decrease. In the coming time, the new land price list will be higher, which means higher land use fees and of course, the cost will be included in the selling price.

In Ho Chi Minh City, according to the draft land price list that is being consulted, the new price has increased by an average of 10-15 times, in some places by 51 times, which is assessed by many businesses and experts as having a significant impact on future selling prices.

Speaking to reporters from Dau Tu Newspaper, a real estate company leader acknowledged that the principle of pricing land according to the market could cause real estate prices to continue to increase. The compensation for site clearance will no longer be as low as before - the period when it was calculated according to the land price list, but closer to the market. This will lead to an increase in the total investment cost of the project.

This person added that 2 years ago, when calculating the preliminary investment cost for a project in Binh Duong, the land use fee for the project was calculated at less than 20 billion VND, but when working with the authorities, it increased to more than 80 billion VND. "In Binh Duong, it is like that, so in Ho Chi Minh City, the housing price level will certainly increase because all input costs are going up," he said.

Sharing the same view, Ms. Nguyen Thi Hong Van, Deputy Director of Valuation and Financial Consulting Department of Savills Hanoi, commented that the biggest impact of the 2024 Land Law on the real estate market is that the Government has removed regulations on land price frameworks, allowing localities to determine land prices according to the annual market. However, the fact that compensation prices are close to market prices along with strict compensation regulations will increase investment costs for real estate projects, thereby pushing up product prices.

Ms. Van predicts that in the short term, housing prices, especially apartment prices, will continue to increase due to limited supply on the market.