Southern real estate market 2023 decreased sharply in all segments

According to the 2023 Housing Real Estate Market Report of Ho Chi Minh City and its vicinity, which was recently announced by DKRA Group on January 5, the market recorded many fluctuations in supply and consumption in most segments last year. Meanwhile, the price level remained high and did not have many clear fluctuations.

Specifically, in 2023, the primary real estate market in Ho Chi Minh City and surrounding areas recorded a significant decrease in supply and consumption in key segments.

A corner of "golden land" in Thu Duc City, Ho Chi Minh City.

The land segment in 2023 will welcome 22 projects with a supply of about 1,850 plots, down 73% compared to 2022, the lowest level in the past 5 years.

Consumption reached about 751 plots, approximately 41% of the total newly launched supply, down 84% compared to the previous year. Transactions occurred mainly in the product group with prices of 12.9 - 14.9 million VND/m2 and common areas from 70 - 90 m2.

The apartment segment recorded 126 primary projects for sale (about 22,071 units) in the year, down 32% compared to 2022, which is also the lowest level in the past 5 years.

The supply for sale is mainly distributed in Ho Chi Minh City (concentrated in the East) and Binh Duong. The consumption volume reached about 9,664 units, equivalent to 44% of the primary supply and decreased by 56% compared to 2022.

Primary consumption is concentrated in mid-range projects with prices ranging from 40 - 55 million VND/m2, with completed legal procedures, rapid construction progress, and convenient connections to the city center.

New supply of townhouses/villas in Ho Chi Minh City and surrounding areas also recorded a sharp decrease compared to 2022.

Accordingly, in 2023, the market will receive 907 townhouses/villas from 28 projects, down 87% compared to the previous year. The localities with the deepest decline are Dong Nai, Long An and Ho Chi Minh City. The market's new consumption is very low, about 315 units, equivalent to 35% of new supply, only 8% compared to 2022.

Transactions occurred mainly in the product group with an average price of 1.9 - 2.4 billion VND/unit and were concentrated mainly in the first 6 months of the year. Binh Duong is the leading locality in the townhouse/villa segment in Ho Chi Minh City and its surrounding areas, accounting for about 47% of the supply and 45% of the new consumption in the whole market.

Resort real estate also recorded a sharp decline in supply and consumption compared to the same period in 2022.

In the resort villa segment, the market recorded 2,542 primary supply units from 67 projects in 2023, down 58% compared to the previous year. The absorption rate reached 21% (equivalent to 526 units), only 13% compared to 2022.

The resort townhouse/shophouse segment recorded primary supply in 2023 from 34 projects, providing the market with about 3,271 units, down 62% compared to 2022. Market demand decreased sharply with consumption reaching about 366 units, equivalent to 6% compared to last year.

The condotel segment in 2023 recorded 5,937 units opened for sale from 45 projects (including 4 new projects). The consumption rate on primary supply reached 20% (1,164 units).

Southern real estate market 2023 decreased sharply in all segments.

Entering 2024, the market is forecast to continue to maintain the same state as in 2023, with the level of positive change depending on each specific segment.

New supply of land plots in 2024 will continue to be scarce. New supply will range from 2,900 to 3,100 plots, mainly concentrated in Long An, Dong Nai and Binh Duong.

Market attention will focus on products developed by reputable investors with strong financial potential and projects with completed infrastructure and legal procedures. Land prices remain stable, with little chance of a sudden price increase in 2024.

In the apartment segment, new supply is forecast to increase compared to 2023, fluctuating at 12,000 - 15,000 units, mainly concentrated in Ho Chi Minh City with about 8,000 - 10,000 units, Binh Duong with about 4,000 - 6,000 units, Dong Nai and Ba Ria - Vung Tau with about 300 - 500 units/locality, other provinces and cities continue to have a shortage of new supply.

Market supply and demand at the beginning of the year did not fluctuate much compared to the end of 2023 and are expected to improve from the third quarter when legal policies are sufficiently "permeated" into the market, helping to remove legal obstacles, as well as the recovery prospects of the economy.

The Grade A apartment segment maintains its dominant position in Ho Chi Minh City, while Grade B and C apartments account for a large proportion in Binh Duong and neighboring provinces. The primary selling price level will not fluctuate much in 2024 or slightly increase due to input cost pressure.

Thy Hue

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