Mismatch between selling prices and homebuyers’ purchasing power evident in HCMC

There were only 60 deals closed in Q3.

According to a report from Avison Young, in Q3 2024, landed properties in Ho Chi Minh City continued to see transactions, with a total of 164 commercial townhouses sold from two new projects: Phu My Hung L’arcade (Phu My Hung) in District 7 and The Meadow (Gamuda Land) in Binh Chanh, along with a few existing projects from previous periods. 

“The market did not record any new supply in the landed housing segment, reflecting a severe scarcity in the market. This situation has led to increased values for existing projects, as demand for this property type remains strong,” the report said.

Here’s more from Avison Young:

As transportation infrastructure continues to develop, particularly with new highways and ring roads, these satellite areas are increasingly attracting market interest, contributing to a new migration trend from central Ho Chi Minh City to surrounding regions. 

However, the number of transactions this quarter was relatively modest, with only about 60 deals, indicating a mismatch between selling prices and buyers' purchasing power, despite the high demand for housing.

Performance

The average prices of landed housing projects in Ho Chi Minh City in Q3 2024 remained stable, ranging from 9,000 to 11,000 USD/sqm for projects within urban areas and approximately 5,500 to 7,000 USD/sqm for standalone properties. In terms of absorption rates, the market recorded levels around 40-50%, a relatively modest figure due to the significantly high selling prices. 

Alongside infrastructure development, the costs of developing real estate projects have continuously risen, making prices increasingly less accessible. Notably, the L’Arcade project (Phu My Hung) within the Phu My Hung urban area is being offered at an average price of around 27,000 to 36,000 USD/sqm based on land area, while The Meadow Binh Chanh (Gamuda Land) has a selling price of approximately 5,000 to 7,000 USD/sqm. 

Additionally, in the secondary market, some products have shown price increases of about 5- 8% in certain residential areas and urban projects with occupancy rates above 50%, such as the Khang Dien projects, which includes Mega Ruby, Villa Park, and Melosa Gardens, etc.