According to a new report from real estate management company, Jones Lang LaSalle Vietnam (JLL), apartment prices in Ho Chi Minh City in the third quarter rose 17.2% year-on-year due to limited supply. However, when compared to the second quarter, prices were down 6.2% because several new projects in the affordable and mid-priced segments have entered the HCMC market with prices that were below average.
JLL’s report notes that because of the global Covid-19 pandemic, and its affects n Vietnam through two “waves,” real estate developers are offering various incentives to prospective buyers that include extensions of payment schedules, zero interest for longer periods and waivers of maintenance fees for two years.
During the third quarter 4,975 units were sold in various projects, with projects in the eastern part of the city receiving the greatest attention from buyers. This area includes District 9 and the Thu Duc area, which HCMC authorities are considering merging to create the Thu Duc “Smart City” area which will include multiple universities, high-tech parks and various technology related companies.
JLL says that in the fourth quarter of 2020 that the apartment supply will increase, with 8,000 ~ 10,000 new units entering the market, which will raise the total new supply of new apartments to 20,000 this year.
When compared to the peak year of 2017 ~ 2018, when 40,000+ new units were added to the HCMC market, 2020 will see only 50% of that volume. JLL notes in their report that one of the key reasons for the decline in new apartments being developed, are the ongoing legal issues that many real estate developments have encountered and which remain unresolved.