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Saigon home prices soar 50% in half decade

Saigon home prices soar 50% in half decade

Apartment prices in Ho Chi Minh City (HCMC) increased by 10 percent a year between 2014 and 2018, according to a recent report by real estate market research firm Savills.

21:00, 28/06/2019

Reportedly, the number of transactions in the period rose by 44 percent a year, reachinh its peak in 2018 with over 49,000 ones. The average price at the end of the period hit $1,600 per sqm.

The high-end segment experienced the highest price rise, while mid-end and affordable segments grew at slower paces.

Between 2014 and 2018, apartment prices in Ho Chi Minh City rose by 10 percent annually.

Between 2014 and 2018, apartment prices in Ho Chi Minh City rose by 10 percent annually.

Besides, the absorption rate also hit the highest ever rate of 87 percent, with growth being particularly evident in affordable segment, which accounted for 60 percent of all transactions between 2014-2018.

The affordable segment is dominated by occupiers/end-users, while the mid-end segment attracts upgraders and buy-to-let investors. Buyers of high-end segment are mainly long-term investors. Until 2020, the majority of stock is expected to be the affordable segment.

According to a survey by VnExpress, the supply of affordable housing is gradually falling across the city as a result of authorities licensing few housing projects in 2018-2020 period.

The housing development plan for 2016-2020 with orientation until 2025, that was approved by the HCMC People’s Committee last November, said until 2020, the city government will not approve construction of new high-rise apartments in downtown area, including District 1 and District 3.

The lack of new supply has pushed up apartment prices in both the primary and secondary markets. Therefore, low-cost housing projects are being moved to neighboring provinces like Dong Nai, Long An and Binh Duong.

CBRE, another real estate services firm, in its market report in Q1-2019, revealed the average price in the primary market rose by 3.1 percent quarter-on-quarter and 14.9 percent year-on-year.

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