Old apartment prices rise 3-8% in HCMC

Tien Long, 41, and his wife said they bought a 63-square-meter apartment in the Hiep Thanh City residential area in HCMC’s District 12 for VND730 million (US$29,200) in 2013.

Having improved their finances since, they recently decided to put the unit on sale for VND2.1 billion, three times their purchase price.

Long said he had researched the market and found that his price was lower than the going rate in the area. In the event, he found a buyer in just a month.

Hue, a 58-year-old merchant, recently sold her 73-square-meter apartment in District 11’s Lac Long Quan Street for VND2.3 billion, 9.5% higher than its putative price at the start of the year. This was twice its original price in 2016.

Almost every unit on sale in Hue’s building is listed at VND2 billion or more, up 5.3-11% in the year to date.

Many apartments in the inner city area that are eight years or older have seen prices rise significantly this year.

At Khai Hoan Apartments on Lac Long Quan Street, prices have gone up to VND1.8-2.7 billion this year from VND1-1.5 billion in 2016. In the last six months average prices have increased by 2.6%.

Old units in Binh Thanh District’s Saigon Pearl neighborhood have jumped by 31.6% from a year ago to VND114 million per square meter, triple their original value of VND38 million in 2016.

Prices at Sunwah Pearl there have also jumped nearly threefold in the last seven years to VND100-140 million per square meter.

A report by real estate services provider Cushman & Wakefield Vietnam said apartment prices in the city have soared by at least 300% in the last decade.

They rose even during the stagnant period when Covid-19 broke out and the broader property market volatility in 2022-23, the report said.

Research by property trading platform Batdongsan found that the increase in apartment prices between 2015 and 2023 outpaced city residents’ income growth.

Affordable apartments valued at VND30 million per square meter or less have experienced the biggest surge, doubling or tripling in price.

Nguyen Hoai An, sales director at Thien Phat Real Estate Company, said the rise in old apartment prices in HCMC is not surprising given that, in the primary market, prices are high and supply is scarce.

Primary market prices have been rising with each new project launched in recent years, and so the secondary market must adjust accordingly, he said.

Vo Huynh Tuan Kiet, senior director at property consultancy CBRE Vietnam, said the price growth is due to a lack of supply, especially of affordable and low-cost apartments, in inner-city districts where high-rise housing development is restricted. Medium-priced and premium units have been dominating supply, he said.

Developers have been hiking prices in recent years to keep up with the increases in raw material and labor costs, and as primary market prices rise, more buyers would turn to old apartments, pushing up demand and prices, he noted. Speculation is also a factor driving up prices, he added.

Nguyen Van Dinh, vice president of the Vietnam Real Estate Association, said finding an apartment priced at under VND30 million per square meter would become increasingly difficult in HCMC.

He said housing supply has been unable to meet demand and is expected to remain scarce for the time being. As a result, prices would likely increase further in the coming years.