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Continuous infrastructure investment, attracting FDI
Synchronous infrastructure investment, attracting FDI, improving per capita income, increasing immigration rate while prices are still reasonable is considered a “plus” for Long An.
Long An is adjacent to Ho Chi Minh City, considered as the gateway connecting the two key economic regions of the East and Southwest. This place continuously receives waves of migrant residents, reducing population pressure on Ho Chi Minh City. Many positive factors have been driving the real estate market in this area in recent years.
First of all, the high attraction of FDI. According to the Ministry of Planning and Investment, in 2023, Long An has had 118 new FDI projects licensed with a total newly registered capital of nearly 603 million USD, along with 81 projects adjusting capital with a total adjusted capital of nearly 118 million USD. As of February 2024, Long An has attracted 1,276 projects with a capital of over 11 billion USD. With this result, Long An ranks in the top 10 leading provinces in the country in attracting FDI. Strong FDI inflows open up great opportunities for the province to catch up with digital transformation according to industry 4.0, creating momentum for economic breakthrough.
Long An ranks in the top 10 provinces and cities attracting the highest FDI in the country.
Second, the average per capita income in Long An is tending to increase, averaging about 12% per year. In the period from 2016 to 2019, Long An had the highest average monthly per capita income in the Mekong Delta region. When FDI attraction increases, along with the promotion of industrial park development, the income of workers is expected to continue to be improved, leading to an increase in the ability to pay for housing.
Third, in recent years, the immigration rate in Long An has maintained a stable growth rate. Specifically, in the period from 2009 to 2021, Long An had a growth rate of nearly 2% of the new population . Worth mentioning, with nearly 1.6 million people, there are 1 million people of working age, of which 71% of the population has received basic training. Long An is also the province with the 7th highest immigration rate in the country, higher than Hanoi. Experts assess that this is seen as a supply base for the local real estate market.
Fourth, infrastructure is continuously focused on investment and improvement. Currently, Long An is focusing resources on building 6 dynamic development axes, including: Ring Road 3 – Ring Road 4 of Ho Chi Minh City; National Highway 50B; parallel with National Highway 62; My Quy Tay – Luong Hoa – Binh Chanh; National Highway N1; Duc Hoa. When these dynamo axes are completed, they not only strengthen regional connectivity but also increase attractiveness for the real estate market.
Fifth, compared to neighboring provinces to Ho Chi Minh City, the real estate prices in Long An are still at a soft level, considered a “price abyss”.
Fast growth but unbalanced
According to the Cushman & Wakefield report, the cumulative supply of landed houses in Long An up to now is nearly 8,600 units mainly concentrated in Ben Luc and Duc Hoa districts, with an average primary price of 49.3 million VND/m2.
For land plots, this is the dominant segment, accounting for a large proportion in the Long An real estate market. By the end of 2023, the general land price here is at the level of 15.9 million VND/m2, with a supply of about 43,000 plots.
Meanwhile, the apartment segment is the segment with the narrowest supply in the Long An market, up to this point. Although there is a great demand for housing, buying for living, there is no supply of apartments to meet this demand.
Long An real estate is still very attractive due to real demand but scarce supply of affordable apartments.
According to the observations, in the past years in Long An, there were only social housing apartments. Since 2021, when the Waterpoint project (Ben Luc district) by Nam Long appeared, the commercial apartment type at an affordable price officially appeared here. At that time, there were about 366 apartments priced from 1 billion VND/unit. Until the end of 2022, there were over 400 new apartments offered for sale, bringing the accumulated supply to nearly 800 apartments. By the end of 2023, the accumulated supply is still the same compared to the same period. It is worth noting that the liquidity of this product line is very good. Almost every sale, the developer sold out, even the appearance of wholesale deals for employees. This shows that the demand for real, reasonably priced products is still very high in the Long An market.
Recently, this market “cheered” another affordable apartment project in the front of My Hanh street, Duc Hoa, Long An, which is Cat Tuong Phu An. It is known that the project has a scale of nearly 1,700 apartments of various types of shophouse, studio, and 1-3 bedroom apartments. It is expected that when meeting the selling conditions, the project will be launched at a price of only 24 million VND/m2. In which, the investor defers the principal for up to 24 months. Banks support loans of 70% for 20 years. In particular, in the launching event, customers have the opportunity to draw prizes including a 2-bedroom apartment, Toyota Camry 2.0Q car, Honda SH 125i, Iphone 15 Pro max, … and many other valuable gifts. Although the exact date of launch has not been announced, this is seen as a new signal about the supply of affordable housing in Long An – a segment expected to strongly promote market liquidity in the region.
Having shared about the affordable housing segment attracting buyers’ cash flow, Mr. Vo Huynh Tuan Kiet, Director of Housing at CBRE Vietnam, affirmed that Long An will emerge as a market for developing apartments under 1 billion VND. This replacement will be a good choice for real estate investors in the context of the continuous scarcity of affordable commercial apartment segments. “Among the neighboring markets to Ho Chi Minh City, Long An is the only locality at this time that can develop a source of affordable apartments under 1 billion VND/unit, replacing the supply of this type of real estate in Ho Chi Minh City and Binh Duong, which has long been extinct”, said Kiet emphasized.
Therefore, considering the entire Long An area, the supply of the main segments is mainly concentrated in Ben Luc and Duc Hoa districts. In particular, the commercial apartment segment at a reasonable price is still seriously lacking. Although it has developed quite early, maintaining a stable pace in various segments, the imbalance of supply in the Long An market is still a problem to be solved in the future.
