Daily real estate briefing: Ho Chi Minh City apartment prices fall as Da Nang land transactions surge

Vietnam’s real estate market continues to show mixed developments. In Da Nang, transactions of land lots increased eightfold compared with the previous month, but overall market liquidity remained low due to substantial inventory pressure. The city has also received a proposal for approval of the investment policy for an infrastructure construction and development project at Location No. 7 within the Free Trade Zone, covering approximately 276 hectares. Meanwhile, Bac Ninh has begun handing over and leasing more than 112 hectares of land in the first phase for Vingroup to develop an urban area of nearly 269 hectares, with total investment of approximately VND 40.125 trillion and a planned population of 33,000. In Ho Chi Minh City, the average primary apartment price after the city’s expansion decreased from VND 92 million to VND 76 million per square meter. The city has also approved an auction plan for three land lots in the Cho Lon area, with starting prices of VND 15 to 16 billion, while Dai Quang Minh proposed a 246.5 hectare TOD plan around Thu Thiem Station.

Real estate supply is forecast to continue increasing, although selling prices in Hanoi and Ho Chi Minh City are unlikely to fall sharply and liquidity has yet to break through. Hanoi is preparing 81 plans to concretize the capital’s master plan with a 100 year vision, including 34 new schemes and approximately 22 zoning plans prioritized for early completion. The city has also required that no high rise housing be built along a 3 kilometer section inside the Red River dike on the Tran Nhat Duat, Tran Quang Khai and Tran Khanh Du routes, except in areas designated for renovation of old apartment buildings. In Nghe An, eight surplus land and building facilities have been offered for lease. The former headquarters of the provincial People’s Court has the highest starting rent, at more than VND 528 million per year for a five year lease. The Viet Ha Beer factory at 254 Minh Khai, occupying approximately 5,000 square meters, has also been included among 58 facilities required to relocate because they do not conform to planning.

Regarding housing demand and finance, young people are advised to carefully assess their income and borrowing obligations before deciding whether to rent or buy. Housing prices have exceeded many people’s ability to accumulate savings, forcing numerous young residents to rent for the long term, although demand for ownership remains clear when financially suitable products become available. As of June 30, credit outstanding for real estate business activities exceeded VND 2.5 quadrillion, while floating interest rates could rise above 14% per year and private banks accounted for the largest housing loan balances in the system. In addition, buyers’ rights involving cemetery related real estate products still need clarification, including transfer mechanisms, prices and long term maintenance responsibilities. Disputes over parking and charging spaces for electric cars in apartment buildings also continue, involving ownership, investment, management and safety. In worker housing, the Dragon Eden project highlights the need for accommodation for thousands of workers and specialists in the industrial area of Tay Ninh, while Evergrande illustrates the lasting consequences of the collapse of a real estate empire. Beyond market developments, residents are also interested in simple solutions for storing belongings, keeping homes organized and reducing bathroom residue.