Apartment prices in Ho Chi Minh City are too high. It takes middle-income earners several decades to buy one.

Savills data shows that in the apartment segment, new supply decreased by 86% year-on-year to 1,980 units; of which the supply in the second quarter accounted for only 19%. There was no new Grade A supply, while Grade C accounted for 77% of the market share. Primary supply of 6,700 units decreased by 59% year-on-year; Grade C accounted for 45%, Grade B accounted for 35% and Grade A accounted for 20% of the market share.

The average selling price is VND 125 million/m2 (net usable area), a 44% year-on-year increase due to high-priced Grade A and B inventory.

Ms. Giang Huynh, Deputy Director, Research & S22M Department, Savills Ho Chi Minh City, commented that current apartment prices are approximately 30 times higher than the average income of city residents.

“ The average income of a household in Ho Chi Minh City is only about 15 million VND/month. Meanwhile, the average price of an apartment in a new project is currently 5.5-6 billion VND ,” the Savills expert commented.

In Ho Chi Minh City, people earning 15 million VND per month would need several decades to be able to buy a house.

Ms. Giang Huynh analyzed that with that income level, if people are able to save 40-50% per month, it would take several decades to be able to buy a house, assuming they don't use credit or receive any assistance from relatives.

“ It would be very difficult for a household with a net income, an average income, to buy a house in Ho Chi Minh City at this time. You need a fairly high income, as well as financial leverage, to be able to buy an average apartment ,” Ms. Giang said.

According to Savills' research, apartment sales in the first half of the year reached 1,170 units, a 90% decrease year-on-year; there were over 300 transactions in the second quarter. The absorption rate for the first six months reached 17%, a decrease of 56 percentage points year-on-year. Of these, Class C apartments attracted more buyers, accounting for 62% of sales. Apartment units priced under VND 5 billion met the needs of many buyers.

In the villa/townhouse segment, no new projects were recorded in the first half of 2023 due to difficulties in raising capital for developers, scarcity of vacant land, and complex legal procedures.

However, the absorption rate in the first half of 2023 reached its lowest level in 10 years at 15%, a decrease of 57 percentage points year-on-year. The number of transactions in the first half of 2023 was only 158 units, a decrease of 74% year-on-year.

“ The cautious sentiment of buyers continues to put pressure on market liquidity. However, the outlook will improve thanks to specific real estate mechanisms, monetary policy, and infrastructure investment ,” Troy Griffiths predicted.

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