“Savills Expert: Post-Merger, Ho Chi Minh City Emerges as the Powerhouse Metropolis of South-Eastern Vietnam”

In a recent sharing, Ms. Giang Huynh, Director of Savills Ho Chi Minh City’s Research Department, revealed that the proposal to merge Ho Chi Minh City with Binh Duong and Ba Ria-Vung Tau is being expedited, promising the creation of a new supercity in the Southeast region. According to the plan, the resolution will take effect from September 1st, and the new Ho Chi Minh City will commence operations on September 15th.

Analyzing the potential of the three areas post-merger, Ms. Huynh stated that the new administrative unit, which will retain the name Ho Chi Minh City, will become a supercity in the Southeast region. The merger will create a new economic and urban center with strong competitiveness, maximizing the natural advantages, geography, and infrastructure of the three localities.

The adjacent locations and well-connected transportation systems among the three localities facilitate more efficient economic and urban planning. The expanded land area provides opportunities for strategies to disperse the population, develop satellite cities, and construct modern new towns. Additionally, transportation infrastructure is expected to be standardized, particularly road, waterway, and seaport systems, enhancing regional connectivity and improving logistics capabilities.

Considering the strengths of each area, the Savills expert suggested that Ho Chi Minh City is currently the center of finance, accommodation services, and housing with the largest population. Binh Duong is regarded as the industrial capital, experiencing rapid urbanization. Ba Ria-Vung Tau possesses advantages in both tourism and industry. Thus, merging these three areas will establish a robust economic region, diverse in industries such as industry, housing, trade services, and tourism.

“Planning on a larger land area post-merger will provide more flexibility in making new planning decisions, shaping future infrastructure and residential areas,” said Ms. Huynh. “This helps address the issue of population dispersal and opens up new housing supply.”

Commenting on Ho Chi Minh City’s residential market in the first quarter of 2025, Ms. Huynh noted that the apartment supply in the city remains scarce, decreasing by 70% compared to the same period last year. Most concerning is the retreat of affordable apartments (priced at around 50 million VND per square meter) in Ho Chi Minh City, accounting for only 13% of the total market supply.

In the future, addressing the supply of affordable housing will remain a significant challenge for the Ho Chi Minh City market. This segment is the most sought-after by buyers, but supply fails to meet demand.

Surveys show that only a few apartment projects in Ho Chi Minh City offer units priced between 3 and 4 billion VND. For example, the Green Town project in Binh Tan district is in phase 2 of sales, with prices ranging around 40 million VND per square meter. The CitiGrand project by Kien A is currently selling units starting from 2.9 billion VND for a 2-bedroom apartment, with limited availability. This project offers competitive pricing compared to the Thu Duc City area, located in Cat Lai New Urban Area (in the former District 2, now part of Thu Duc City), with construction reaching the 15th floor.

In the Thu Duc City area (former District 9), the MT Eastmark City project by Dien Phuc Thanh is trading at around 50 million VND per square meter. A 2-bedroom apartment here costs approximately 3.5 to 3.7 billion VND. This is also considered a reasonably priced supply in Ho Chi Minh City.

Previously, the Akari City project by Nam Long in Binh Tan district was sold at a price range of 55-60 million VND per square meter, but its inventory has been sold out. Secondary market transactions in this project have increased by about 5-7% compared to the pre-Tet period.

According to Savills experts, the merger of Binh Duong and Ba Ria-Vung Tau into Ho Chi Minh City could potentially lead to a more diverse range of options in the market in the future. Particularly, the Binh Duong area, with its abundant project launches, will supplement Ho Chi Minh City’s supply. However, this area also faces a scarcity of apartments priced between 30 and 40 million VND per square meter. Most projects launched at this time are in the range of 50-60 million VND per square meter, with some even priced above 70 million VND per square meter. This indicates that finding affordable housing in Ho Chi Minh City post-merger will not be an easy task.

Savills experts attributed the bottleneck in the supply of affordable apartments to two main factors. Firstly, land funds in Ho Chi Minh City are becoming increasingly scarce. Secondly, land prices and development and construction costs have risen significantly. Legal procedures, which are often cumbersome, also contribute to the challenge of improving supply.

To enhance the effectiveness of the merger of the three localities in terms of socio-economics and the real estate market, Savills experts identified four factors that need to be addressed simultaneously. These include reviewing and simplifying administrative and land-related procedures, comprehensive planning by formulating a unified plan for land and infrastructure development, establishing efficient public investment disbursement mechanisms for infrastructure, and, lastly, having a clear common development strategy.