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Lack of new supply driving up prices of housing in HCMC

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Property prices in HCM City are continually rising due to a shortage of new projects. VNS/VIET NAM NEWS

Lack of new supply driving up prices of housing in HCMC

The prices of properties with land in Ho Chi Minh City increased by 15 per cent in the third quarter from the same period of last year due to lack of new supply, according to a report by property consultancy JLL.

The luxury segment saw prices rise by 14.7 per cent year-on-year and 3.1 per cent quarter-on-quarter to $5,337 per sqm.

The second wave of Covid-19 played a strong role in the market, eliminating short-term speculators with limited capital from the property market.

Houses with land and costing below $450,000 attracted a lot of interest as people bought them to lease or for appreciation in value in future.

But those costing more than $450,000 did not have much demand.

Licensing issues and credit tightening continued to be the main challenges for the condominium market.

Buyers have difficulty buying units, not because they cannot afford them, but because they cannot find suitable options.

On the other hand, developers are well-positioned to increase profits thanks to the shortage of existing condo projects in the primary market.

Primary prices will continue to increase due to a lack of supply.

The luxury segment is expected to see prices increase by 10 per cent, while the high-end and mid-priced segments will see five per cent increases year-on-year.

The affordable segment will rise by a modest two per cent.

The secondary market will be more active due to a lack of supply in the primary market and new pricing levels across the market.

End-users may find limited options in the primary market and may turn to the secondary market which offers both completed projects and those with good construction progress.

Around 300-400 units are expected to be launched in the last quarter of this year, taking the number for the full year to 2,500 units, 40 per cent lower than in previous years as the city tightened control over grant of land-use rights and construction licences.

With limited supply and high demand, prices in the primary market are likely to keep rising.

VIET NAM NEWS/ASIA NEWS NETWORK

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