Land continues to cool down
Since the middle of 2022, the land market in Binh Duong has been slow to pick up pace. Land prices have decreased or stagnated, and some investors facing financial difficulties have been selling their plots below the original purchase price.
The land segment in the South, particularly in Binh Duong, witnessed modest absorption rates in the first few months of 2024. Source: DKRA Group
Data from Batdongsan.com.vn for April 2024 revealed that while the number of land listing posts in Binh Duong increased, the demand for land purchases decreased. This decline was most notable in the case of project land.
In the three central areas of Binh Duong: Thuan An, Di An, and Thu Dau Mot, the demand for land decreased by 3%, 7%, and 6%, respectively. Even the real estate market in Ben Cat, which officially became a city in early May 2024, did not witness any positive fluctuations in terms of land search demand.
DKRA Group’s land market report for May 2024 also indicated that the land supply in Binh Duong was mainly concentrated in Ben Cat, accounting for 95% of the total supply in the Southern market. However, absorption during May plummeted to just 1%.
Specifically, in Ho Chi Minh City and the four neighboring provinces, including Binh Duong, there were a total of 241 land plots offered for sale in May 2024, but only two were sold. Primary land prices remained relatively stable compared to the previous launch. Secondary prices continued to decrease by an average of 15% compared to the beginning of 2022.
Apartment segment picks up pace
Apartments are currently the standout segment in the Binh Duong market, witnessing increased search demand for both sales and rentals. While the area boasts the second-highest supply of apartments in the Southern real estate market, there is a shortage of completed projects. Consequently, the demand for rentals is growing quite well in this segment.
According to observations, the demand for apartment rentals in Binh Duong is quite high. Two-bedroom apartments priced from VND 2.1-2.4 billion per unit are currently renting for approximately VND 9-15 million per month, depending on the project and location. Some projects near universities, office buildings, and industrial parks have achieved high occupancy rates for rentals.
According to Batdongsan.com.vn’s May 2024 data, apartments are among the top segments in terms of search interest for both sales and rentals.
For example, Phu Dong Sky Garden, a project by Phu Dong Group in Di An City, Binh Duong, is one of the few soon-to-be-completed projects in the area that is experiencing strong demand. This project meets crucial criteria for high rental potential and immediate cash flow generation. Specifically, the project is located just 600 meters from Pham Van Dong Street, in a bustling area with a high population density. It is also a 10-minute drive from the university village, accommodating tens of thousands of new students each year, and only 12 kilometers from District 1, providing convenient access to the city center for workers. As a result, the area attracts a diverse range of tenants, ensuring strong rental demand.
In terms of sales transactions, liquidity in Binh Duong’s apartment projects primarily comes from mid-range projects priced between VND 32-40 million per square meter, with completed legal procedures, good construction progress, and locations close to Ho Chi Minh City. In the second quarter of 2024, primary apartment prices in Binh Duong showed slight increases of 2% to 5% compared to the end of 2023. Nevertheless, developers are still offering various incentives, such as quick payment discounts, grace periods, and loan interest subsidies, to stimulate demand amid challenging market conditions.
The demand for apartment purchases in Binh Duong is skewed towards completed or near-completed projects, especially those close to handover. This trend is considered appropriate given the current market dynamics, with an increasing demand for apartments for rental exploitation in the area and a limited supply of completed primary projects.
DKRA Group’s data for May 2024 revealed that apartment prices in Ho Chi Minh City ranged from VND 52.6 million per square meter (lowest) to VND 493 million per square meter (highest). In contrast, Binh Duong’s price range was VND 31.6 million per square meter (lowest) to VND 47.8 million per square meter (highest). Some areas in Di An City, Binh Duong, which borders Thu Duc City in Ho Chi Minh City, offer prices that are half of those in the neighboring city, making it an attractive option for practical homebuyers.
Additionally, the demand for housing in Binh Duong is surging due to the development of industrial parks and an increasing immigration rate, ensuring stable housing demand. In recent years, the province has experienced a growing influx of foreign and domestic workers, including a significant proportion of highly skilled labor.
However, regarding the future supply of apartments in Binh Duong, there is a trend towards developing high-end projects. Several new projects currently underway or about to commence in Di An, Thuan An, the New City, and Thu Dau Mot mostly fall within the price range of VND 45-50 million per square meter. It is becoming increasingly challenging to find primary apartment projects in the mid-range price category of below VND 35 million per square meter in Binh Duong. This situation may pose challenges in establishing prices for new projects in the future, especially as construction and development costs continue to rise.
Easier mortgage interest rates
Starting from the beginning of the year, banks have been implementing various low-interest credit packages, offering loans to pay off debts from other banks… with the aim of stimulating the demand for home loans.
A road in Ho Chi Minh City unaffected by rent hikes, customers still compete to rent despite high prices.
After just 2 weeks of being listed, a townhouse with a rental price of 47 million dong/month on Hoang Dieu 2 Street, Thu Duc District (formerly, now Thủ Đức City, HCMC) has found a new owner. This is a street with very few vacant spaces, bustling with business activities leading up to Tet.
Binh Duong: Land prices to increase up to 247% from current prices.
If passed, the proposed Resolution will result in an increase in land prices in Binh Duong province, ranging from a minimum of 11% to a maximum of 247% compared to the current prices. This adjustment is aimed at aligning the land prices with the current reality, as some communes are upgraded to wards and towns.
