Highlights of the Ho Chi Minh City real estate market.

According to CBRE, the significant decrease in new supply occurred amidst a localized land fever in some districts of Ho Chi Minh City and surrounding areas, which has driven up transaction prices for land-attached real estate products.

Alongside this, the market for commercial townhouses has developed strongly and received significant attention from buyers. By the end of 2018, the entire market for ready-built townhouses and villas in Ho Chi Minh City welcomed an additional 1,251 units from 12 projects. The majority of products offered for sale in 2018 were townhouses, with 722 units, accounting for 57.7% of the new supply. Most of this new supply came from subsequent sales phases of previously launched projects such as Simcity Phase 2 (Q4/2018), Lovera Park Phase 3 (Q1/2018), and Dragon Village Phases 1 and 2 (Q1 and Q2/2018). The significant shortage of new supply led to a high market absorption rate. Overall, the entire market achieved an average absorption rate of approximately 91.1% in 2018.

The Eastern District, encompassing Districts 2 and 9, continues to lead the market in terms of new supply growth, with these two districts bringing 998 units to the market in 2018, accounting for 79.8% of the city's total supply. Due to the shortage of new supply, selling prices in the secondary and primary markets, especially for commercial townhouses, are trending upwards rapidly. In the primary market, the average selling price of ready-built villas reached US$4,153/m² of land, a 47% increase compared to last year. Ready-built townhouses also showed a similar upward trend, with a 65% increase in 2018 compared to 2017.

However, the most impressive growth was seen in ready-built commercial townhouses. While the average primary market price of commercial townhouses across the entire market in 2017 was $2,400/m² of land, by the end of 2018, the price of this product had reached $5,264/m² of land, a 2.2-fold increase compared to 2017.

Overall, the focus of new supply development for the ready-built townhouse and villa market in Ho Chi Minh City is currently in suburban areas and border regions between Ho Chi Minh City and the provinces of Dong Nai, Binh Duong, and Long An. This trend is expected to continue in the coming years due to the scarcity of clean land within Ho Chi Minh City. Furthermore, the asking prices of projects in these areas are significantly lower than those in the inner city. In addition, with the advantage of abundant supply and diverse product types, these areas will increasingly attract the attention of investors.

BK - HU