Monday , May 27 2024

HCMC apartments become smaller as prices rise

Housing developers in Ho Chi Minh City and nearby localities have been scaling down apartment sizes in recent years to make them more affordable.

Dung recently bought a two-bedroom apartment in Thu Duc City for VND3.2 billion. At 58 square meters, the unit is smaller than the 65-sq-m size that was popular in 2021.

“It is smaller, but I am happy with it because this is the biggest I can afford.”

Another homebuyer, Huyen, of Binh Tan District, bought a 56-sq-m apartment for VND2.8 billion. In 2019 for the same price she could have got a 68-sq-m apartment, but she did not have the money then.

Apartments are shrinking also in places like Binh Duong and Dong Nai provinces and Vung Tau City as property developers seek to make them more affordable amid rising prices.

Before 2017 a three-bedroom apartment was usually at least 110 sq.m in size, but now it has fallen to around 90 sq.m.

Two-bedroom units have shrunk from 80 to 60 sq.m, and there are now a lot of studio apartments of 35-45 sq.m.

Analysts said reducing the sizes is part of developers’ survival strategy amid surging prices.

Apartment prices have risen by 77% per square meter in the last five years, which included a 19-quarter rising streak, according to data from property consultancy Savills Vietnam.

At an average price of VND60 million per square meter (according to the Ministry of Construction) a two-bedroom apartment of 60 sq.m now costs VND3.6 billion.

This is a reasonable price tag for a large number of buyers. A recent survey by Property Guru, the operator of property listing platform, found that 45% of prospective buyers were looking for apartments priced at VND2-4 billion.

Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association, said there are expenses that developers just could not reduce, such as land use fees, and therefore their solution for bringing down prices is to reduce the size.

Dao Minh Tuan, director for the south, said buyers are reconciled to the smaller sizes since they could not afford to pay more, and living in smaller spaces is becoming an inevitable trend in HCMC.

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