HCMC house prices surge to 10-year high

This marked a 17% increase from the first three months, real estate agency Cushman & Wakefield (C&W) said in a note.

A report by property firm DKRA Group said the most expensive unit is priced at VND750 billion, up from the VND700 billion seen during the peak period of 2022.

Property consultancy Savills Vietnam noted that primary market prices have tripled in the last five years.

House prices are rising due to a lack of supply, analysts said. Cushman & Wakefield said only 337 new houses were placed on sale in the second quarter, down 61% from a year ago.

This is due to many projects being delayed and property developers opting for high-rise apartment buildings instead of low-rise houses.

Trang Bui, CEO of C&W Vietnam, explained that with land becoming increasingly scarce and expensive, developers are prioritizing high-rise housing projects since they are more profitable. The high house prices resulted in a 59% year-on-year decline in sales in the first half, with only 173 units sold, according to C&W.

Giang Huynh, head of research at Savills Vietnam, said the absorption rate in the case of villas priced above VND30 billion was just 6% in the second quarter. Even townhouses, the best performing segment, only saw a 31% absorption rate.

Market researchers expect the supply of townhouses, shophouses and villas in HCMC to remain constrained in the next three years, with most upcoming projects located five to 25 kilometers from the city center as developers seek out cheaper lands in places such as Binh Chanh and Nha Be districts and Thu Duc City, and even neighboring provinces.