The booming supply of luxury apartments has made the HCMC market more competitive.
New high-end apartment projects developed in the central districts of Ho Chi Minh City have made the competition on this million-dollar market more intense.
By Phuong Uyen
Since the beginning of this year, many new luxury apartment projects have kicked off on “golden land” sites in Ho Chi Minh City’s (HCMC) central districts. The housing supply has risen strongly, leading to a more competitive market.
In early August, property developer CapitaLand released its D1MENSION project, located on Vo Van Kiet Street in District 1. Luxury apartments in this project are listed at US$4,000 per sq m. Meanwhile, Thao Dien JSC also launched more than 1,000 apartments at the Masteri Millennium project along Ben Van Don Street in District 4.
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Also in District 4, Trung Thuy Group is simultaneously developing two high-end projects: Lancaster Lincoln on Nguyen Tat Thanh Street and Lancaster Residences D4 on Ton That Thuyet Street.
Downtown HCMC is also expected to welcome other new projects in late 2017 and early 2018. For example, The Nexus developed by Refico is going to enter the market by the end of this year. This project comprises three 40-floor blocks and is located on Le Loi Street in District 1.
Major property developers such as Novaland, Phat Dat, Him Lam and C.T Group also announced their new key projects in District 1 and District 3. Two of the most outstanding projects are Madison (Thi Sach Street) and Saigon Me Linh Tower (Hai Ba Trung Street).
This shows that the competition among high-end real estate developers is very fierce. Most of the projects in downtown HCMC are priced from US$3,500 to US$7,000 per sq m. As supply is starting to overwhelm demand, property developers have to find new ways to attract customers who are becoming increasingly picky.
However, Ms Duong Thuy Dung, director of research and consulting at CBRE Vietnam, said that although prices of super-luxury projects in HCMC are very high, they are still more affordable than other markets in Southeast Asian countries. Prices of luxury apartments in HCMC range from US$ 3,500 to US$7,000 per sq m, while similar unit types are listed at US$20,000 to US$25,000 per sq m in Singapore and US$7,000 to US$10,000 per sq m in Bangkok. This is helping to attract more buyers who are overseas Vietnamese and foreign investors. Luxury apartments are also expected to bring high profit to buy-to-rent investors. In the downtown area, the lowest rent for this segment is US$25 per sq m per month. Wealthy tenants from Japan, US, UK, Singapore and Germany are keen on renting homes in the city centre.
Therefore, Ms Dung expects that from now until the end of the year, high-end real estate will maintain a high absorption rate at about 50 percent. Improvements in infrastructure and macroeconomic factors will continue to support the real estate market. In addition, the growing service infrastructure will also attract cash flow from customers who want to invest in “golden land” sites in downtown HCMC.
This article originally appeared on property portal Batdongsan.