Homes in Alleys: The Hidden Challenges of Selling

The year-end period is typically a bustling time for real estate transactions. However, this year, the townhouse segment in Ho Chi Minh City, particularly alleyway houses, has been rather sluggish. Notably, this trend has persisted since the beginning of the year.

Listed for Sale All Year with No Buyers

Real estate agents report that alleyway house prices in Ho Chi Minh City have dropped by 15%-20%, and in some cases, even 25%-30% compared to 1-2 years ago, yet transactions remain challenging.

Mr. Nguyễn Văn Hùng, owner of an alleyway house on Huỳnh Văn Nghệ Street (Tân Bình District, Ho Chi Minh City), shared that his family has been trying to sell their car-accessible alleyway house, measuring 5m x 18m with a 1-story and 2-level structure, for nearly a year at 12 billion VND, but to no avail. “I’ve reduced the price to 10.5 billion VND, yet there’s still no deal,” Mr. Hùng said.

In another case, Mr. Hoàng, owner of a storefront property on Phú Thọ Hòa Street, decided to lower the price by an additional 500 million VND from the initial listing to expedite the sale. The property, measuring 4m x 10m with a 1-story and 3-level structure, is now listed at over 8 billion VND. “Since I need funds to settle bank debts by year-end, I’m selling it now, but typically, this area would fetch over 9 billion VND,” shared Mr. Quốc, the agent handling the sale.

Observations indicate that in areas like Phú Nhuận, Gò Vấp, and old Bình Thạnh, the number of townhouses listed for sale is surging, giving buyers ample options and room for negotiation.

“Buyers with cash in hand can easily negotiate a 5%-10% discount, and in some cases, if the seller is in urgent need of capital, buyers can even offer 15%-20% less but with an immediate deposit, which sellers often accept. The key is a quick and smooth transaction to avoid additional bank interest,” shared Ms. Nguyễn Thảo, a townhouse agent.

According to lawyer Lê Xuân Huân from Thái Long Law Firm, the demand for home purchases among young people is rising, but there’s a shift towards condominiums rather than landed properties. “Young people prefer condos due to their affordability, numerous amenities, and modern lifestyle compatibility. Townhouses, on the other hand, are more suitable for middle-aged individuals or those seeking long-term residence,” Mr. Huân noted.

Mr. Huân also mentioned that after a significant surge in 2023-2024, townhouse prices have stabilized and entered an adjustment phase. “For those needing to sell quickly to recycle capital by year-end, deep price cuts are almost inevitable,” Mr. Huân added.

Demand Still Exists

Mr. Đỗ Linh Đan, a seasoned townhouse agent, noted that year-end transaction demand for both townhouses and condos is rising, but only properties with significantly reduced prices compared to the market average are selling. Bank interest rates have increased by 1%-2%, and with many banks reaching their credit limits and halting disbursements, market liquidity has noticeably slowed in the past month.

According to Mr. Đan, previously, many banks offered home loans at 8%-9% per annum, but now rates have risen to 10%-11% per annum, with some banks even suspending loans due to reaching their limits. This has made buyers relying on financial leverage more cautious, while sellers face greater pressure.

Mr. Đinh Minh Tuấn, Director of the Southern Region at Batdongsan.com.vn, observed that detached houses are becoming increasingly picky for buyers due to a lack of amenities, poor living environments, and issues like flooding, traffic congestion, and limited parking in many areas. “Buyer preferences have shifted, with a 3% increase in the trend of moving to suburban areas since the beginning of the year, as residents prioritize more spacious living environments,” Mr. Tuấn said.

Another real estate expert noted that the price drop for alleyway houses is understandable. “Issues like flooding, traffic congestion, and fires in old residential areas are driving many to move to suburban areas, choosing houses in urban developments or on spacious main roads for long-term living. Alleyway houses in the inner city were previously bought for business purposes, but as residents accumulate wealth, they tend to relocate,” the expert analyzed.