According to CBRE, the significant decline in new supply occurred in the context of a local land fever in some districts of Ho Chi Minh City and neighboring areas, pushing up transaction prices of real estate products attached to land.
Along with that, commercial townhouses have developed strongly and received great attention from buyers. By the end of 2018, the entire market of townhouses and ready-built 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 new supply. Most of this new supply came from the next sales phases of projects that had been introduced to the market before, such as Simcity phase 2 (Q4/2018), Lovera Park phase 3 (Q1/2018), Dragon Village phase 1 and 2 (Q1 and Q2/2018). The large shortage of new supply has pushed the market's consumption rate to a high level. Overall, the entire market reached an average consumption rate of about 91.1% in 2018.
The Eastern region, including Districts 2 and 9, continues to lead the market in terms of new supply growth, with 998 units launched in 2018, accounting for 79.8% of the city’s total supply. Due to the lack of new supply, product prices in the secondary and primary markets, especially commercial townhouses, have been increasing rapidly. In the primary market, the average selling price of ready-built villas reached 4,153 USD/m² of land, up 47% compared to last year. Ready-built townhouses also showed a similar upward trend, increasing by 65% in 2018 compared to 2017.
However, the most impressive growth is in the ready-built commercial townhouses. If in 2017, the average primary selling price of the whole market for commercial townhouses reached 2,400 USD/m² of land, by the end of 2018, the selling price of this product on the market had reached 5,264 USD/m² of land, an increase of 2.2 times compared to 2017.
In general, the focus of new supply development for the market of townhouses and ready-built villas in Ho Chi Minh City is located in the suburban areas and bordering areas between Ho Chi Minh City and the provinces of Dong Nai, Binh Duong and Long An. This trend will continue to be strengthened in the coming years in the context of the scarcity of clean land funds within Ho Chi Minh City. On the other hand, the selling prices of projects in the above areas are much cheaper than those in the inner city of Ho Chi Minh City. In addition, with the advantage of abundant supply and diverse product forms, these areas will increasingly attract the attention of investors.
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