The Southern Apartments Sprint to the Year-End Finish Line

The latest report from DKRA Group for August 2024 reveals that the supply of apartments is mainly concentrated in Ho Chi Minh City and Binh Duong Province. Transaction data shows that mid-range projects priced at VND 45-60 million/sqm in Ho Chi Minh City and VND 30-35 million/sqm in Binh Duong Province are the most active.

As we enter the final quarter of the year, many developers are gearing up for new launches, and DKRA Group expects a significant boost in supply.

Ho Chi Minh City continues to see supply dominated by familiar developers such as Nam Long, Vingroup, Gamuda Land, Dien Phuc Thanh, and Khai Hoan Land, with prominent projects including Vinhomes Grand Park, Eaton Park, Khai Hoan Prime, and Akari City.

The year-end “playing field” seems to favor neighboring provinces like Binh Duong and Dong Nai. Binh Duong, in particular, remains a vibrant hub for apartment supply in the Southern market. A series of condominium projects priced around VND 30 million/sqm or below have been introduced, attracting stable interest. Notable projects include Phu Dong Skyone, Phu Dong Sky Garden, Ben Hill Thuan An, TT Avio, Bcons City, A&T Sky Garden, Picity Sky Park, The Gió, Honas Residence, and The Emerald 68.

A site visit to the Phu Dong SkyOne construction site in early September 2024 revealed a bustling atmosphere. Tower B has completed columns and walls up to the 3rd floor and is preparing for the 4th-floor slab construction. Tower A is undergoing slab construction for the 3rd floor. With the current progress, the project is ahead of its initial schedule.

According to the general contractor, Thai Thinh, the use of aluminum formwork technology in construction increases costs but speeds up progress by 30-50% while enhancing the aesthetics and durability of the building. Hundreds of engineers and workers are currently on-site, and this number is expected to increase to meet the target of reaching the 9th floor by the end of the year.

In Dong Nai and Long An, notable projects include Destino Centro and FIATO Airport City.

Mr. David Jackson, CEO of Avison Young Vietnam, shared his insights on the market, stating that the real estate market is expected to improve towards the end of the year. However, each segment will have a different response to the policies in place. As a result, the pace of recovery and growth will vary across property types.

Specifically, the apartment segment is poised to benefit early from the new laws. While housing supply may not increase rapidly in the second half of 2024, the market has already shown signs of recovery, with transactions resuming. Notably, the pent-up demand for housing has spurred a desire to purchase. The new laws have also created a positive sentiment in the market, with hopes that projects entangled in legal issues will find resolution and restart.

On the other hand, the tourism and resort real estate segment still requires additional solutions and a more comprehensive legal framework. Industrial, office, and retail real estate, meanwhile, are experiencing stable growth due to increased demand for land and premises leasing.

The Avison Young expert also emphasized that, from the end of 2024 onwards, Binh Duong and Dong Nai are expected to become the new focal points of the Southern residential market, after Ho Chi Minh City. These provinces offer several advantages, including their proximity to Ho Chi Minh City, well-developed infrastructure and connectivity, abundant land funds with well-planned areas, a high concentration of industrial parks and export processing zones, and a young population with a large proportion of migrants.

There is a substantial demand for affordable housing in these provinces, which is expected to grow further. Recently, several new projects have been launched in the VND 30-35 million/sqm price range, achieving positive absorption rates. In the next few years, Binh Duong and Dong Nai are anticipated to be the main drivers of improving the supply of affordable housing in the Southern market,” emphasized Mr. David Jackson.

According to Mr. Jackson, real estate prices are expected to continue rising. Detached houses and land plots, in particular, are forecast to experience significant price increases following the new regulations prohibiting land division, allotment, and transfer to individuals in special, type I, II, and III cities.

Additionally, apartment prices are likely to increase due to strong investment, purchasing, and rental demand. Furthermore, the rental prices of commercial real estate, including industrial land, office space, and retail premises, are expected to grow steadily due to the rising demand for land and premises leasing for production and business activities.

From a macroeconomic perspective, Mr. David Jackson pointed out that businesses face challenges due to the difficult economic environment and operational costs. Therefore, there is a need to continue managing prices, supply, and demand while streamlining administrative procedures to support businesses and reduce cost burdens.

Real estate businesses and investors eagerly await the detailed guidelines and implementing laws for the three real estate-related laws. This will allow the market to adapt to the new policies and promote sustainable development in the industry.