The Ho Chi Minh City People’s Committee has recently issued a plan for the auction of 3,790 apartments in the R1, R2, R3, R4, and R5 blocks of the new Thu Thiem Urban Area in An Khanh Ward.
According to the plan, the auction will be conducted for two blocks of apartments (Block R1, R2, and R3 with 2,220 units, and Block R4 and R5 with 1,570 units) intended for commercial residential purposes in An Khanh Ward.
The Ho Chi Minh City People’s Committee has assigned the Department of Agriculture and Environment (as the standing agency of the Auction Working Group) to regularly inspect and urge the implementation of this plan.
These 3,790 resettlement apartments were completed in 2015 and are part of the 12,500-apartment program for resettlement in the new Thu Thiem Urban Area.
However, as most of the affected residents of the new Thu Thiem Urban Area project chose to receive compensation for self-resettlement, only a few blocks are occupied. A small number of apartments, such as the New City complex by Thuan Viet Company (with 1,229 units), were converted into commercial housing from the beginning of construction.
Ho Chi Minh City first put these 3,790 resettlement apartments up for auction in 2017, with a starting price of VND 8,800 billion, but found no buyers. Since then, the city has organized several more auctions without success in finding investors for these apartments. It is expected that the fifth auction for these apartments will take place in 2025.
Currently, many apartment blocks and units in the complex show signs of deterioration.
A neglected stairway in the complex.
The communal elevator lobby has long been unused.
The exterior lobby has become covered in moss over time due to abandonment.
Fire protection equipment is damaged.
In reality, the main reason for the repeated unsuccessful auctions by Ho Chi Minh City is the financial challenge it poses. This has deterred enterprises from participating in the bidding process.
According to regulations, enterprises participating in the auction must deposit 20% of the starting price. If the winning bidder is announced, they must pay 50% of the winning bid value within one month and the remaining 50% within 90 days.
In reality, raising approximately VND 10,000 billion within three months is a challenging task for most real estate enterprises.
Furthermore, as this resettlement area has been abandoned for a long time, there are signs of deterioration. If converted into commercial housing, investors would have to pay additional land use fees, which makes it less appealing.
Currently, the lowest selling price for projects in the new Thu Thiem Urban Area is VND 150 million per square meter. Projects in adjacent areas also have prices ranging from VND 100 million per square meter. This means that a two-bedroom apartment with an area of approximately 70 square meters would cost at least VND 7-10 billion. In contrast, the average price of each resettlement apartment being auctioned is only about VND 2.6 billion.
These 3,790 resettlement apartments were built a long time ago and have been abandoned for many years, leading to the deterioration of infrastructure, technical systems, fire protection equipment, and more.
As these apartments were designed for resettlement purposes, they lack aesthetic appeal, high-quality construction, and adequate amenities, which further reduces their value compared to commercial housing projects in the same area.
Therefore, leaders of many real estate enterprises believe that even with a fifth auction this year, it will be challenging to find investors due to the apartments’ outdated design, deterioration, and lack of amenities.
To address this issue, experts have proposed converting these 3,790 resettlement apartments into social housing.
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