Apartment market in Ho Chi Minh City is bustling

After the apartment price fever in Hanoi, the old and new apartment market in Ho Chi Minh City has recently become more bustling as the demand for buying and selling has increased. The reason is explained that the market has gradually overcome the difficult period, the deep decrease in interest rates has stimulated the demand for buying to live and rent.

Demand is increasing strongly.

In high-end apartment complexes such as Vinhomes Central Park (Binh Thanh District), Vinhomes Ba Son (District 1) and Vinhomes Grand Park (Thu Duc City), information on buying and selling apartments is constantly being exchanged by freelance brokers and trading floors.

A broker named Dung said that there is currently a high demand for Vinhomes apartments for rent because the rental price is quite good, more profitable than depositing in a bank. Mr. Dung calculated that with an investment cost of 3.5 billion VND for a 1-bedroom apartment at Vinhomes Central Park, renting for 17-18 million VND/month, the average annual income is about 200-210 million VND, calculated at more than 6%.

Not to mention, apartment rental prices can increase annually, apartment prices also increase correspondingly by 3%-5% per year. Meanwhile, the annual savings interest rate is less than 5% per year. "Current customers mainly buy in cash, they are interested in 1-bedroom apartments for easy rental. Currently in Vinhomes Binh Thanh, an officetel apartment costs about 3.5-3.6 billion VND, while a permanent apartment has increased to 4.2-4.3 billion VND" - this broker said.

The apartment market in Ho Chi Minh City is starting to increase in price again. Photo: TAN THANH

In other high-end areas such as The Sun Avenue and Masteri Thao Dien in Thu Duc City, the demand for apartments has also increased significantly compared to 2023, with buyers and sellers transacting quickly and not hesitating like a few months ago.

According to Mr. Tuan Hoang - a broker in Binh Thanh District, District 1 and part of Thu Duc City (old District 2), since the beginning of the year, the demand for buying and renting apartments in residential areas with full amenities has increased significantly. Brokers constantly ask each other about the source of goods to introduce to customers. The increased demand has led to an increase in apartment prices of about 3% - 5% in just a few months, with each apartment increasing by an average of 200-500 million VND, and large and beautiful apartments can increase by up to 700 million VND.

In the more affordable segment, projects such as City Gate Towers - fronting Vo Van Kiet Street (District 8) - are attracting a lot of attention, especially those with average incomes due to their affordable prices, 2.1-2.5 billion VND for a 2-bedroom apartment. Ms. Luong - an apartment broker in this apartment building - said that recently, there have been many customers who are young couples asking to buy houses in this area because of the affordable prices and convenient transportation.

Mr. MT, a young doctor working at Le Van Thinh Hospital (Thu Duc City), said he had just bought a 2-bedroom apartment, with an area of ​​over 60 square meters on Lien Phuong Street, Thu Duc City for nearly 2 billion VND. "Someone advertised a cheap apartment for sale, close to my workplace, and the bank interest rate is low, so I decided to borrow a few hundred million VND more to buy a house and pay in installments of 10 million VND each month. This amount is about 2-3 million VND higher than my rent, but in return, I have a place to settle down and work, and in a few years I will pay off all my debt" - Doctor T. shared.

Buyers fear missing out

The real estate market in Ho Chi Minh City is gradually improving, including the apartment segment, so notary offices are more active than before. A notary office specialist on Xo Viet Nghe Tinh Street (Binh Thanh District) said that the number of customers coming to notarize real estate procedures, especially apartments, has recently increased by 20%-30% compared to a year ago.

At the meeting on the socio-economic situation of the Ho Chi Minh City People's Committee on the afternoon of May 3, the Ho Chi Minh City Department of Natural Resources and Environment said that this agency had processed more than 120,000 real estate transaction records in the first 4 months of the year, an increase of 13% over the same period in 2023, equivalent to 15,000 records.

Transactions were mainly concentrated in four areas: Thu Duc City, Binh Tan District, District 12 and Cu Chi District. The bustling real estate transactions also helped increase revenue from land use right registration and certification in Ho Chi Minh City, reaching more than VND2,500 billion.

A newly published survey by the Dat Xanh Services Institute of Economics - Finance - Real Estate Research (DXS-FERI) shows that the demand for real estate, mainly apartments, has increased sharply in the first quarter of 2024. Specifically, nearly 80% of customers switched from renting to buying apartments when interest rates were low. Of which, the demand for buying to live accounted for 58%, buying for rental exploitation accounted for 18% and long-term investment accounted for 16%, only 3% -5% was for short-term investment or other purposes.

According to this survey, the apartment price range that many people choose is from 2.5 billion VND or less, accounting for 68%, while the range of 2.5-3.5 billion VND accounts for 22%, about 7% of respondents are interested in the 3.5-5 billion VND segment, and the remaining only 3% have a need to buy a luxury apartment over 5 billion VND.

Explaining the recent increase in demand for real estate in many localities, Mr. Tran Khanh Quang, General Director of Viet An Hoa Real Estate Investment Company, said that in the context of the real estate market having overcome the most difficult period, interest rates for deposits and loans have both decreased sharply, investors have continuously introduced preferential policies to sell products, especially the Government has promoted real estate support solutions, which have contributed to boosting market confidence. Investors, those who have the need to buy houses and land, have been relieved of psychological barriers, thinking that "it is time to buy", otherwise they will "lose the opportunity", "lose good prices" ... thereby promoting transaction activities in the apartment market.

What is happening in the apartment market in Hanoi is the clearest proof. "It is understandable that buyers at this time choose apartments with full legal documents for investment in renting or living because this segment always brings good cash flow. As far as I know, apartments that have been handed over or are about to be handed over have increased in price by 8%-12% from the bottom in the past year. Meanwhile, in Hanoi, apartment prices have increased by 30%-50% in the past 1-2 years" - Mr. Khanh Quang said.

According to Mr. Le Bao Long, Strategy Director of Batdongsan.com.vn, in urban areas such as Hanoi and Ho Chi Minh City, in addition to residential land, the demand for buying apartments for living and investment has been attracting cash flow steadily for many years. And in 2024, the apartment segment will continue to attract cash flow.

Scarce supply, price unlikely to fall

According to experts, scarce supply and increasing demand are the reasons why apartment prices are unlikely to decrease in the near future.

The Ministry of Construction's report shows that in the first quarter of 2024, the whole country had only 10 completed commercial housing projects with a scale of 4,706 apartments, equal to 34.48% compared to the fourth quarter of 2023 and equal to 71.43% compared to the same period in 2023. Of which, there were only 3 projects in the South. In addition, there were 19 newly licensed projects with a scale of 9,774 apartments, equal to 95% compared to the previous quarter, equal to 111.76% compared to the same period in 2023, but mainly concentrated in the North, the South had no projects.

CBRE Vietnam’s Q1/2024 report also shows that the supply of apartments in Hanoi and Ho Chi Minh City continues to be scarce. In particular, in Ho Chi Minh City, only about 500 apartments were offered for sale, the lowest in the past 15 years and only about 17% compared to the same period last year.

Source: https://nld.com.vn/thi-truong-can-ho-o-tp-hcm-soi-dong-196240506215530072.htm