Not many projects

Since the beginning of 2024, the real estate market in Ho Chi Minh City has not maintained its performance as in previous years. In almost all real estate segments such as apartments, land, villas, townhouses, etc., supply has decreased severely, and market liquidity is no longer continuous.

According to CBRE Vietnam’s market report, in Ho Chi Minh City, the number of new apartments launched in the first quarter of 2024 was about 500 units, of which 80 were in the high-end segment. This is also the lowest number of apartments offered for sale in a quarter in the past 15 years in this city.

At the meeting reporting on the housing development situation in the city by the Department of Construction of Ho Chi Minh City (March 2024), Mr. Vu Anh Dung, Deputy Head of the Department of Housing Development and Real Estate Market, Department of Construction said that in the first 2 months of the year, the Department received 2 applications requesting notification of eligibility for capital mobilization.

However, after review, both projects are not qualified. In addition, in the first quarter of 2024, only 1 housing project was approved for investment policy.

Mr. Dung also said that the project's legal factors greatly affect the supply. Many projects that have been approved for investment policy and investment approval are still stuck with procedures regarding financial obligations, land, planning, and some projects even have to review the project's legal aspects, land origin, etc.

Therefore, when the Department of Construction considers the eligibility for capital mobilization, housing projects in these cases will not meet the requirements.

Mr. Luu Quang Tien, Deputy Director of the Institute for Economic - Financial - Real Estate Research Dat Xanh Services said: The apartment market in Ho Chi Minh City has grown more slowly in recent times as supply, selling prices and absorption rates have all decreased.

“Speaking of the difficulties of the market in recent times, the legal aspect is still the stage that causes many projects to be ‘stuck’. Current investors are forced to slow down and change their strategy to complete legal procedures in accordance with the law. This also limits the supply to the market, making real estate segments in the city scarce and the supply greatly reduced,” Mr. Tien shared.

Sharing about the lack of supply in the real estate market in Ho Chi Minh City, Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), also said that 70% of the difficulties of real estate businesses are related to legal problems.

In the city alone, there are dozens of real estate projects that are "stalled" due to legal problems, and there are also 357 projects (accounting for 24.7%) that are "suspended", mainly due to problems with compensation plans. This has made it impossible for investors to introduce new products in recent years.

Cheap apartments are increasingly rare

According to Nguoi Dua Tin 's research, from the end of 2023 until now, in Ho Chi Minh City, only a few investors such as Nha Khang Dien; Nam Long Group; Dien Phuc Thanh Company... have launched products for sale on the market.

The real estate segment is mainly apartments that have been legally prepared for many years before being introduced to the market, however the prices of these products are also high.

Ms. Giang Huynh, Deputy Director and Head of Market Research and S22M, Savills Vietnam also commented that currently, the Ho Chi Minh City market no longer has products under 2 billion VND and 90% of transactions are in the segment from 2-5 billion VND/unit.

According to Savill, in the period of 2024 - 2026, the number of apartments priced at 2 - 5 billion VND will become increasingly scarce, the supply is mainly concentrated in the segment of 3 to more than 5 billion VND/apartment. There are even apartments for sale priced from 7 - 10 billion VND in Thu Duc city area (Ho Chi Minh city).

Sharing with Nguoi Dua Tin , Mr. Nguyen Viet Hung, General Director of Westland Trading Joint Stock Company said: "Currently, the supply of apartments as well as land and townhouse products in Ho Chi Minh City is slowing down, this has been happening for the past 2 to 3 years.

To complete the project, it must go through a series of legal steps and a long time with many costs, which causes the selling price of real estate products to increase. Currently, finding a cheap apartment under 2 billion in the city area is very rare. Secondary products have also passed a new price level, so buying a house will become more and more difficult.

According to Mr. Hung, currently, people who want to buy houses are changing their strategies such as switching to housing products in neighboring areas such as Long An, Binh Duong, Dong Nai... with more affordable prices.

The prices of apartments and real estate products in this area are lower than in the city and the legal status is more stable and standard.