The real estate market in Ho Chi Minh City’s (HCMC) Thu Duc City is forecast to develop strongly by the year-end despite the Covid-19 pandemic, according to Savills Vietnam.
Thu Duc City was established on January 1, 2021. Before and after deciding to develop the Vietnamese “city within a city”, real estate transactions in this market have increased in both quantity and price.
This is a common performance of the property market in urban areas and towns when being converted to a city that makes a more attraction for this property market.
Savills Vietnam senior director Dr Su Ngoc Khuong said the Thu Duc property market has seen an increase in expensive apartment projects with rapid liquidity at the price of more than 100 million dong ($4,400) per sqm. The supply is not much, while the demand of the people is real, so it is not surprising at the appearance of this property product.
“House and apartment products in the Thu Duc City have recorded much higher prices than before due to many factors, including information on the establishment of ‘a city within a city’. This will increase the level of investment and budget in technical, social and transportation infrastructure in this area,” Khuong said.
The supply of apartments in HCMC is very limited. Districts that are close to the city centre of District 1, including the old District 2, Phu Nhuan, Binh Thanh and District 3, have a decreasing land fund. District 9 and Thu Duc City near District 1 and District 3 are expected to have strong development on the property market, according to Khuong.
Real estate investors have grasped the favourable conditions on land fund and planning, and people’s needs to design a project in accordance with expectations of the market. This also makes the investors change their pricing strategy.
Khuong said: “For customers who buy to live, the end of the year is a good opportunity for them to own a home in the context of a limited supply in the market. They should choose products of reputable developers.”
The luxury and high-end real estate segment is not for customers who want a quick investment because the liquidity for those products on the secondary market is not easy. The customers of this product line often have financial ability.
The luxury and high-end housing projects having products meeting the customers’ needs and reputable investors have had quick transactions, according to Khuong.
Although the pandemic is still a challenge, affecting the economic growth rate, the residential real estate market is forecasted to always be hot with high demand, especially in big cities like Hanoi and HCMC, according to Savills Vietnam.
At the year-end, a number of expensive apartment projects in both Hanoi and HCMC have been sold outright after launching. This is also a factor to make the investor push the price up. However, the project’s legal procedure is still a difficulty for these investors.
Meanwhile, the land fund is limited in the urban centre, so for projects with good locations, a higher price than before is inevitable.
However, products with affordable and medium prices always are large segments of the urban real estate market. The demand for those products will stay at a high level.
Meanwhile, the supply of those products will continue to be limited because the pandemic affects the development of the products as scheduled, making offered prices for them increase.
VIET NAM NEWS/ASIA NEWS NETWORK
