A Series of Apartment Buildings Anticipate Affordable Housing Releases

The condominium market in Ho Chi Minh City (HCMC) and its neighboring areas is experiencing renewed activity as several developers prepare to launch projects. Affordable housing options remain available if developers are willing to accept reduced profits.

Ever since the onset of the Covid-19 pandemic, the condominium market in HCMC and adjacent provinces has been particularly vibrant. Real estate enterprises have unveiled their business strategies for the year, with some condominium projects gearing up for market release.

In East Saigon, brokerage floors eagerly await official announcements from developers regarding a project comprising 2,000 apartments located on Mai Chi Tho Street, Thu Duc City. The project is currently accepting reservations for its first sales event, scheduled for April 2024.

As disclosed, the selling price of apartments in this project is approximately 120 million VND per square meter. The developer offers a policy where buyers can pay 65% until receiving the property.

Along Mai Chi Tho Street, another condominium project featuring over 2,300 units, backed by a Singaporean developer, is set to debut this year. This mixed-use project, comprising commercial, service, and hotel components across two towers, generated significant investor interest with leaked renderings towards the end of last year.

One of the most anticipated luxury condominiums in Thu Duc City this year is the high-rise precinct within The Global City urban area, boasting approximately 8,000 units. While no official information has been released by the developer, the commencement of townhouse district handovers late last year suggests that the high-rise precinct may see development this year.

The selling price of condominiums at The Global City is expected to be below 120 million VND per square meter.

Also in the luxury segment, approximately 2,000 units in The Opus One precinct at Vinhomes Grand Park, Thu Duc City, are scheduled to hit the market in April 2024. This is the final precinct to be developed in this urban area, with selling prices not lower than 100 million VND per square meter.

In South Saigon, The Aurora apartment project within Phu My Hung New City, District 7, will be introduced in the coming days. Following the launch of Cardinal Court in 2021, The Aurora is the only condominium project Phu My Hung has brought to the market.

The Aurora is one of the last three projects on Nguyen Luong Bang, District 7, referred to as the "financial and service street." The selling price for this project is estimated to range from 80 to 110 million VND per square meter.

Data from a real estate market research firm indicates that the supply of new apartments in HCMC in 2024 will quadruple compared to the previous year. The B-grade apartment segment accounts for 44% of the market share, while C-grade apartments make up 19%, and the remaining 37% belong to the A-grade segment. The firm forecasts that by 2026, HCMC will have 40,800 apartments from 116 projects available for sale.

In the neighboring areas of HCMC, on March 6, the SkyOne apartment project in Phu Dong, Tan Dong Hiep Ward, Di An City, Binh Duong Province, was introduced to the market by the developer.

This project comprises 780 apartments, 75% of which range from 42 to 62 square meters, with prices ranging from 1.4 to 1.8 billion VND per unit. The remaining 192 apartments are priced from 2.2 to 2.5 billion VND per unit.

The SkyOne project broke ground in December 2023 and is currently under construction. It is expected to sign purchase contracts with customers by the end of the second quarter of 2024.

Ngo Quang Phuc, CEO of Phu Dong Group, believes that the most challenging period has passed for the real estate market. Real estate is still considered a necessity, and apartments meeting practical needs with prices ranging from 2 to 3 billion VND per unit continue to be in high demand. Additionally, the high-end apartment segment remains relevant.

"This is a good time to buy a house because the selling price is unlikely to decrease further. In the next few years, if Phu Dong Group launches another project with a similar location to SkyOne, the selling price will surely increase by 20-30% compared to the current price," Phuc said.

The CEO noted that five factors determine housing prices: land costs, construction costs, selling expenses, financial costs, and investor profit expectations. It is impossible to reduce these costs, so if developers want to sell quickly and offer affordable housing to customers, the only option is to reduce profit margins.

Comparing the apartment market between HCMC and Binh Duong, a representative from Savills Vietnam assessed that selling prices in Binh Duong are more competitive. This is why the area attracts many homebuyers.

According to the expert, the demand for housing in Binh Duong is increasing due to industrial development and a high immigration rate. This creates stability in terms of demand and ensures market development. However, rapid development puts significant pressure on price setting for new projects.

Savills Vietnam predicts that in 2024, 96% of the apartment supply in Binh Duong, Dong Nai, and Long An provinces will be priced below 5 billion VND per unit. This is seen as a solution to the "thirst" for affordable housing in the HCMC area.