Being- completed apartment projects in Ho Chi Minh city are running into strong competition

The supply of apartments being completed in Ho Chi Minh City is expected to increase in the coming time. However, the secondary price fluctuates differently in each project, creating a strong price competition in the market.

Being- completed apartment projects in Ho Chi Minh city are running into strong competition

According to the record at this stage, the real estate products being completed are entering the race in both real demand and investment at handing over. The majority of projects are in the process of completion, the number of products launched to the market is not much, the secondary price is in average increase of 15-20% compared to the first period.

The recent survey in Tan Phu district, Ho Chi Minh City shows that, currently, this area has more than 10 apartment projects in the process of basic completion and being launched to the market. Secondary prices in each project are quite competitive.

The projects, which have been basically completed at medium price range in Tan Phu district, are gaining much attraction from customers. The price increase on the secondary market is also quite impressive. Photo: P.N 

The market is witnessing many projects in the range price of VND 2 billion each as new source of supply. For example, the Carillon 7 project (Luong Minh Nguyet Street, Tan Phu District) of TTC Land is currently being launched the last 80 units among a total of 625 units at the price of VND 30 million / m2 (about VND 2 billion/apartment with area of 65.97m2). Currently the project has been basically completed.

Located in the same area is the Hung Thinh Melody Residence project with current offered secondary price of at VND 2.4 billion per area of 68m2 (about VND 35 million/m2). Or Au Co Tower apartment project of Investor 577 is offered secondary price at VND 32 million/m2 (about VND 2.1 billion/ apartment with area of 65m2).

Another project also located in the same area is Richstar of Novaland, which has an area of 63m2/ apartment with selling price starting from VND 40 million/m2. Or Ress Green Tower of 11 Real Estate Joint Stock Company is offered secondary price of 60m2 unit at around VND 2.3 billion/unit that is equivalent to 38 million dong/m2.

In adjacent areas such as District 11, District 6, some projects being basically completed have been offered secondary prices differently from VND 3 million to VND 13 million/m2 (depending on the project) compared to the projects in Tan Phu district. For example, the Ress 11 project (District 11) is currently offered secondary price at VND 43 million/m2 that is equivalent VND 3.1 billion to own an area of 73m2. Meanwhile, in the Him Lam Cho Lon project (District 6), an area of 82m2 costs about VND 2.9 billion/apartment (VND 36 million/m2).

Many upcoming projects located in the same area with competitive prices are also challenges for real estate brokers. However, according to regional brokers, each customer has a certain "standard" but in general most of them looking for projects locating near the center, fully equipped, good educational environment for children and moderate prices within their reach.

In fact, with the location about 10-15 minutes riding motorbike to the center of District 1, District 3, it is rarely to have the project “within the reach”, most of projects are offered at price fluctuating around VND 40 million / m2 and the offer price from VND 29 million to VND 30 million/m2 is even less. Particularly in Tan Phu district, finding projects that are about to hand over at prices of around VND 30 million / m2 (about VND 1.8-2 billion/apartment) is no longer easy. According to some enterprises, it is not only a challenge for customer and markets, but it is also an opportunity for enterprises to "measure" the price suitable for customer at this stage.

According to recent study, the districts in the western area of Ho Chi Minh city, especially Tan Phu district, despite the advantages of longtime existing community utilities, a shortage of qualitative apartment projects of big investors still remains. There is a fact that real estate projects developed previously have not been invested in a synchronous and separate way, thus failing to meet the actual housing demand. The most problematic issue for customers in Tan Phu district is the internal utility chain which has not been invested in modern and large scale like other areas in Ho Chi Minh City.

  The projects with the affordable price always gain most attraction from customers 

As records, the average annual price increase in projects reached from 10 to 15%, some projects with good location, secured construction progress, convenient connection with neighboring areas could archive price increase from 20 to 25%.

It has been around 2 years ago since leading real estate investors such as Novaland, Hung Thinh, TTC Land, etc came to deploy medium-scale projects that made the market here emerging. For the moment, in this area there are many large projects being formed and invested with well- equipped internal utility combined with longtime external utilities, creating a strong wave of settling and investing in the regional market.

Consequently, secondary price of apartments has been in good growing momentum in the past few years. According to the record that the average annual price increase in projects reached from 10 to 15%, some projects with good location, secured construction progress, convenient connection with neighboring areas such as District 11, District 6, Tan Phu District, Binh Tan District, Tan Binh District, could archive price increase from 20 to 25% / year.

Especially, a number of projects launched from the beginning of 2018, are currently in the process of basic completion to be handed over with high absorption rate of 80-90%, mainly from real demand and secondary prices increasing rapidly.

Meanwhile, in the real estate market in the eastern area of Ho Chi Minh City, the projects to be completed at the streets such as Do Xuan Hop, Vo Chi Cong, Nguyen Duy Trinh etc, secondary price is recorded with an average increase of around 7% to 10%. Some projects with prime location may have price increase by 15% to 20% /year.

Compared to the western area of Ho Chi Minh City, the eastern area is strongly invested in infrastructure but it is objectively considered as "new land" so the social utilities such as shopping malls, hospitals and entertainment areas etc, have not yet been formed densely as they are in the western area. In consequent, the absorption rate in the secondary market is slower than that of projects located in Go Vap district, Tan Phu district, Tan Binh district and Phu Nhuan district.

Recent study also shows that apartment projects with fully equipped utilities and handing over upon purchase attract buyers who are mostly young families. Especially, apartments with area from 60-80m2 have very good absorption rate in both primary and secondary markets. Some projects, which are located on streets that have synchronous utilities, bustling commerce, attracts both end customers and investors at this stage with majority are young families.

Source: Ha Vy – Tri Thuc Tre