Thursday , September 29 2022

HCMC apartment sales lowest in six years


While HCMC apartment prices rose 10-15 percent year-on-year, 2021 sales dropped to the lowest level since 2015.

According to a report by real estate services provider DKRA Vietnam on the housing market in 2021, a total of 10,749 apartments were sold in the city, compared with 15,200 units in 2020, and nearly 23,000 units in 2019, and 25,000-36,000 units a year in the 2015-2018 period. The sales last year accounted for 79 percent of the supply.

The situation of higher prices and lower liquidity resulted from the thin supply, the report said. Investors have gradually shifted to high-end and luxury housing segments, ignoring the affordable segment, it added.

The higher apartment prices on the primary market were also based on escalated input costs.

Last year, 22 real estate projects, nine new and new phases of 13 operational ones, launched 13,583 apartments, down 23 percent against 2020. Both supply and demand decreased sharply against previous years to the lowest since 2015, the report said.

Grade A (high-end) apartments continued to lead the market, accounting for 72 percent of supply and 69 percent of sales.

It was the third consecutive year that the market saw a scarcity of Grade C apartments priced under VND30 million ($1,300) per square meter. Meanwhile, super-luxury apartments established a new price level of nearly VND400 million per square meter.

According to DKRA Vietnam, HCMC’s apartment market faced the biggest difficulties in more than half a decade last year, including supply-demand mismatch (excess of high-end apartments but shortage of low-cost ones), unsolved problems in project licensing procedures and Covid-19 outbreaks.

The thin supply of apartments pushed prices up and the complicated pandemic situation reduced demand among those wanting to buy apartments to live in or as investments.

The firm forecast that if the pandemic is brought under control like in the fourth quarter of last year, the economy continues to recover and legal problems related to project licensing are resolved, housing supply and demand will improve. However, reducing housing prices will remain a challenge because land prices are rising, and material prices as well as financial, construction and sales costs have increased.

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