A recent assessment by Savills Vietnam has revealed a “harsh” reality: apartments priced at VND 3 billion in Ho Chi Minh City are considered affordable. Here, income is struggling to keep up with property prices.
In Ho Chi Minh City’s market, reasonably priced properties (ranging from VND 3-4 billion) are no longer easily found in the outskirts of the central area. Moreover, without support from the developer’s sales policies or bank loans, few can afford these prices.
Finding affordable housing during the year-end season has become a challenge for many homebuyers. Illustration
An analysis of Ho Chi Minh City’s property market reveals a scarcity of completed projects offering prices below VND 50 million per square meter for handover by the end of this year. In the city’s western region, only Nam Long’s Akari City Phase 2 is nearing completion of its final stages for handover in Q4 2024 (nearly 2,000 families have already moved into Phase 1). Phase 2, comprising over 1,600 apartments, broke ground in late June 2022. Despite market challenges, the developer remains committed to the construction schedule to deliver homes during the upcoming Tet holiday. This project stands as one of the rare completed affordable housing options left in Ho Chi Minh City’s apartment market.
Notably, amidst economic challenges and income instability, the developer has struck a balance by offering reasonable prices and supporting homeownership initiatives to alleviate financial burdens on buyers. During this period, Nam Long introduced attractive incentives of up to VND 700 million for customers who opt out of bank loans. For those who choose to borrow, the partner bank will provide a credit limit of 70% of the apartment value, with an interest-free period of 18 months and a 24-month grace period on principal repayment. These policies are crucial for individuals seeking affordable housing with a manageable payment plan.
According to a recent statement by the sales department of a Ho Chi Minh City-based real estate company, 60-70% of apartment buyers rely on bank loans and prioritize price when making decisions. Completed projects mostly attract buyers with actual housing needs, especially those looking to move into their new homes before Tet. Investors, on the other hand, focus on profit-taking or leasing opportunities. For projects still under development, investment demand slightly outweighs actual housing needs.
However, a common thread among these buyer profiles is the significant reliance on bank loans or seeking flexible payment methods from developers. Homebuyers eagerly anticipate innovative sales policies during the year-end season to increase their chances of owning a home.
Mr. Vo Hong Thang, Deputy General Director of DKRA Group, affirms that homebuyers’ confidence has rebounded. Nevertheless, rising property prices and a shortage of affordable options pose significant barriers for many. It is becoming increasingly challenging for buyers to find reasonably priced homes in Ho Chi Minh City.
In Ho Chi Minh City’s apartment market, transactions have predominantly occurred in projects priced between VND 40-60 million per square meter, but this supply is gradually shrinking. As a result, homebuyers face greater challenges in their quest for affordable options, and their homeownership plans are delayed compared to their initial timelines.
The new law positively impacts homebuyers’ psychology. Source: Batdongsan.com.vn
The enforcement of real estate-related laws has further bolstered homebuyers’ confidence. Many believe that the real estate market is entering a new cycle, significantly influenced by the changes brought about by these three laws, which will impact property prices and supply. Consequently, some individuals are seizing the opportunity to secure housing before prices potentially climb to new heights.
Conversely, others feel that the chance to own a home in major cities is continually “slipping through their fingers” due to affordability constraints. It is understandable that homebuyers are cautious when choosing where to settle down. Ultimately, their decision-making process is hindered by financial limitations and a market that falls short of providing sufficient affordable options to meet their needs.
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