The housing market in Ho Chi Minh City is experiencing a rapid increase in supply, but the recovery in transactions is slow. The new sales market is primarily focused on high-end and luxury units, leading to increased price burdens. While some prices in the secondary market have decreased, buyers are adopting a wait-and-see approach, anticipating further adjustments.
According to local media, including VnExpress, the supply of new apartments in Ho Chi Minh City exceeded 7,150 units in the second quarter. The total supply in the primary market expanded to over 14,200 units, marking a 156% increase from the previous quarter and approximately 35% from the same period last year.
Despite the increase in supply, actual sales have not met expectations. The total number of apartments sold in Ho Chi Minh City was about 7,680, with an absorption rate of only 39%. In the city center, sales were limited to 1,781 units, with an absorption rate of approximately 31%. Compared to the previous quarter, the absorption rate showed slight improvement, rising by 3 percentage points due to increased transactions in mid-range apartments in the Binh Duong area. However, compared to the same period last year, the absorption rate is down 24%, indicating a continued trend of sluggish transactions.
Disparity in Absorption Rates by Price Range
There is a noticeable disparity in transaction rates by price range. According to the One Mount Group, apartments priced between 60 million and 120 million VND per square meter accounted for more than half of all transactions, with an absorption rate of about 59%. In contrast, high-end apartments priced above 120 million VND (approximately $5,100) had an absorption rate of only about 20%.
Market research firms attribute the slowdown in transactions to high selling prices and financial burdens. Knight Frank reported that the average price for primary sales in Ho Chi Minh City was $3,670 per square meter, equivalent to about 95 million VND, an 8% increase from the same period last year. The price increase reported by the One Mount Group was even higher, with primary sales in central Ho Chi Minh City averaging around 103 million VND per square meter, and Binh Duong at about 60 million VND, reflecting a 33% increase year-on-year.
The gap between the structure of new supply and actual demand is also limiting the recovery of transactions. Market demand is focused on reasonably priced products for actual residence, but the new supply still heavily favors high-end and luxury complexes. Developers are offering interest rate support, payment deferrals, and discounts, but there are limits to reducing the price burden itself.
Son Hoang, Deputy Director of Research and Consulting at Knight Frank Vietnam, noted that buyers' selection criteria are shifting towards actual residence. He stated, "Demand for living is prioritized over investment, with buyers favoring projects that are reasonably priced, have clear legal procedures, and stable progress."
Secondary Market Prices Decline, Buyers Remain Cautious
In the secondary market, price adjustments are becoming evident. According to media reports, the selling prices of secondary apartments in Ho Chi Minh City have decreased by about 5-10% since the beginning of the year. Homeowners needing quick sales and investors facing high loan burdens are leading the price reductions. Some urgent sales are listed at more than 10% below previous prices. However, even with price reductions, these listings are not immediately resulting in transactions, as buyers are delaying decisions due to concerns about further price declines.
DKRA Consulting also reported that the average price of secondary apartments in Ho Chi Minh City fell by 3-6% in the second quarter compared to the previous quarter. The eastern and northern regions saw declines of about 2-6%, while the western and southern areas dropped by 4-6%, and the city center experienced a decrease of 3-5%. Data from the real estate platform Batdongsan indicated that secondary listings in various complexes in Ho Chi Minh City are down 3-7% from the start of the year.
The pressure to lower prices is particularly pronounced among investors burdened with financial obligations. The Vietnam Real Estate Market Research Institute analyzed that investors who purchased apartments during the market's rise with high loan ratios are now facing repayment burdens, leading them to lower their expected returns or accept losses to sell. Investors who anticipated short-term profits are also listing properties as the market's upward trend has stalled.
Looking ahead, the market is likely to diverge further based on price range and location. Knight Frank predicts that approximately 76,000 units will be added to Ho Chi Minh City by the end of 2027, with 31,740 of those units expected to be supplied in the city center.
Meanwhile, opinions among online commenters regarding the market are mixed. Some believe that the slowdown in transactions does not necessarily indicate a market decline, suggesting that buyers are becoming more cautious and selective. One commenter noted, "Given the significant increases in land, material, labor, and infrastructure costs in recent years, it is difficult for housing prices to return to levels seen a few years ago."
Conversely, others pointed out that current apartment prices are excessively high compared to most income levels. Another commenter stated, "High prices, strict credit conditions, and elevated interest rates are causing hesitation among both actual buyers and investors, making liquidity reduction an inevitable outcome."
Additionally, there is a belief that projects with good locations and product quality will continue to maintain demand. Commenters suggested that urban projects with major transportation networks, subway lines, and living infrastructure, as well as low-rise residential products, could attract interest in terms of long-term value. They identified the developer's reputation, construction progress, expected delivery capabilities, and post-occupancy operational quality as key criteria for maintaining transactions during this market restructuring.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.