Townhouses in the East of Ho Chi Minh City follow infrastructure progress, prices are expected to continue to increase

The "price spikes" of street-front townhouses

If the supply of townhouses and villas in urban areas is low, then the supply of commercial townhouses with street frontage in Ho Chi Minh City is even scarcer, even this type of house has been absent from the market for a long time. Along with the scarcity of supply, the price level has continuously jumped, making many people wonder, why are prices so "dizzying"?

Over the past decade, the real estate market in the East of Ho Chi Minh City has seen "quantum leaps" in the price of this product line in District 2 (now Thu Duc City, Ho Chi Minh City). Commercial townhouses with street frontage in Thu Thiem, An Khanh, An Phu, or Thao Dien increasing 4-6 times in value when they were first sold is no longer a strange story. An increase of 100% to over 200% in a period of 1-2 years has occurred in some urban areas in District 2, pushing the real estate price level in this area to be clearly different.

SOHO commercial townhouses on Do Xuan Hop frontage have just been launched on the market.

For example, street-front townhouses on Nguyen Co Thach Street, District 2, cost around VND30-40 billion in 2015. By 2021, the secondary price had increased to VND100-130 billion/unit. Currently, depending on the area, street-front townhouses here range from VND200-400 billion per unit.

Another project in District 2 also increased about 2-3 times compared to the time of first sale in 2015, currently secondary apartments here are traded from 45-55 billion VND/unit (depending on area).

Or on Vo Nguyen Giap Street, Thao Dien, District 2, the commercial townhouses of the Masteri An Phu project have increased by about 30-50% compared to the time of initial sale (2018). Currently, the secondary units are offered for sale at prices ranging from 26-34 billion VND/unit.

A shophouse project in Thu Duc City has run out of supply from the investor, only secondary products are being traded at 35-35 billion VND/unit (for units with an area of ​​140-180m²). Meanwhile, in 2020, the selling price here was 14-16 billion VND/unit. The rental occupancy rate is currently over 90%.

Recently, in An Phu Ward, District 2, the limited number of SOHO commercial townhouses at The Global City has been launched on the market and received positive attention. This is also a rare primary product line appearing in the East of Ho Chi Minh City. The price of each shophouse here ranges from 30-50 billion VND/unit with a usable area of ​​350-650m².

According to records, compared to normal townhouses in urban area projects, the price difference of commercial townhouses with street frontage is 20-70% higher (depending on the project). Although the price is high, the demand for this segment is quite large. Most projects with the advantage of being close to metro lines or expanded dynamic roads in the East of Ho Chi Minh City have sold quite well before, currently the occupancy rate of tenants is stable.

Currently, although the price fluctuation is not as strong as in the period 2015-2018, the street-front townhouses still have their own attraction to investors. The scarcity of the product is one of the reasons that creates attraction and causes the price level to continuously increase. This type only accounts for about 5-7% of the total project's basket of goods. At the same time, due to its high profitability, meeting both the needs of use and the value of business exploitation, as well as being a long-term accumulated asset, many investors are interested in street-front townhouses.

Sharing about this segment, Mr. Le Quoc Kien, a veteran real estate investor in Ho Chi Minh City, said that in the long run, when projects are filled with residents, residents will tend to prefer shopping on the spot rather than going to shopping malls or shops and restaurants far from where they live. Therefore, the type of street-front townhouses for business in urban areas is of interest.

Supply is forecast to continue to be scarce, prices will continue to increase

In the first quarter of 2024, Savills pointed out, The townhouse and villa segment, including commercial townhouses in Ho Chi Minh City, recorded primary supply reaching its lowest level in the past 10 years.

Supply has been limited for three years, mainly due to legal barriers, leading to limited new projects. The total primary supply currently on the market is 762 units. Products priced above VND30 billion account for 76% of the market share. Notably, 85% of the primary supply is located in Thu Duc City.

It is expected that on August 1, 2024, when the 2024 Land Law takes effect, the cost of real estate will increase, causing prices to continue to rise. Along with that, the 2023 Real Estate Business Law takes effect, the number of investors meeting the requirements for project implementation may decrease, causing supply to be even narrower. Commercial townhouse real estate is no exception, especially when this product already has a small supply of new products.

According to industry experts, future real estate projects will need to meet more stringent conditions to meet legal standards for sale, and investors will take more time to prepare for sale. The upcoming market is unlikely to experience a supply explosion. Thus, the number of newly approved projects is expected to be scarce. Projects with full legal documents for sale at this stage are considered an advantage.

The supply of street-front townhouses will continue to be in short supply in the future.

Recently, the real estate market in the East in particular and Ho Chi Minh City in general has shown signs of a return to demand, partly due to the impact of laws that are expected to take effect soon, which will cause real estate prices to increase. This will encourage buyers to spend money before the laws take effect.

Particularly for the type of commercial townhouses, Mr. Le Quoc Kien also advised investors to carefully consider factors such as the area, project and reputation of the investor. Up to now, shophouses in a project have been a "rare commodity" - this is the criterion and the biggest competitive advantage of this type. Therefore, investors need to consider whether the proportion of shophouses in the project meets the scarcity criteria or not.

In addition, investors need to carefully research the legality of the project, the surrounding population density, as well as learn about the potential for increasing intellectual property through infrastructure planning and local development...

Source: https://thanhnien.vn/nha-pho-khu-dong-tphcm-di-theo-tien-do-ha-tang-du-bao-tiep-tuc-tang-gia-1852406260921532.htm