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HCM City real estate: The differrent between luxury apartments and popular apartments

Demand for large apartments but supply is declining

At present, supply-demand of high-end apartments and popular apartments of HCM City real estate market is clearly phase shift.

Demand rose – supply declined

According to a report from Ho Chi Minh City Real Estate Association (HoREA), after many ups and downs, crisis and recovery, growth, real estate market in HCM City is showing signs of supply declined.

Specifically, the luxury and luxury segment is down 25.9%. However, this segment still accounts for 41.8% of total supply. The average segment is also down 32.6%. Remarkably, the popular segment dropped sharply, almost 70%, and only accounted for 20.5% of total supply.

Demand for large apartments but supply is declining
Demand for large apartments but supply is declining

In fact, HCMC has increased by 500,000 people per year, half of whom are immigrants, but only about 10,000 are offered to the market, thus meeting only 5-10% of the demand. in. HoREA said this is a manifestation of the supply – demand phase gap, unsustainable development in the real estate market in HCMC.

HoREA said: “The real estate market develops sustainably and equitably when the segment of affordable apartments has the largest share, followed by the middle segment, Senior households will occupy the smallest proportion. “

This unit further commented that the shortage of low-priced commercial apartments, social houses and low-cost apartments in line with the financial capacity of workers and low-income people made the market HCMC real estate market is risky enough to cause instability.

Why investors are not indifferent to the popular apartment?

There are many reasons for the decline in the supply of condos, including tightening credit to real estate, limited financial support for real estate from the government. a lot of.

As for the non-salty investment in popular apartments, representatives of some real estate firms said that the input costs increase makes the investment is calculated more carefully than before. Cheap land for developing low-cost projects is also very low. Therefore, although the supply of this segment is lacking, businesses still “hesitate” to participate.

In addition, profit is a problem for investors. Profit margin of the popular segment is only 8-12%, while the premium segment may be from 30 to 40%.

Although the average apartment supply is lacking, investors still focus on high-end apartments to achieve high profits.
Although the average apartment supply is lacking, investors still focus on high-end apartments to achieve high profits.

Due to the supply of apartments in general and the average apartment in particular is declining, the price of apartments in the real estate market in HCMC increased gradually, about 0.34% compared with the first months of the year. The price of luxury apartments increased 0.14%, the average apartment price also increased 0.48%, the average apartment rose 0.25%. In the residential segment, the price also increased in the 0.92%.

In the low-rise segment of projects, due to the limited number of goods, few new projects are put into the market, consumer demand for this type of house increased, so the selling price also increased.

The demand-supply phase of high-end and low-end apartments pose a new challenge for investors and restructuring of products to meet the real demand of the market.

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