The real estate market in Ho Chi Minh City has Slowed Down

Since the end of the second quarter of 2022, the real estate market in Ho Chi Minh City has shown signs of “deceleration”, slowing down, quiet development, especially in the secondary market.

According to information from the Department of Construction of Ho Chi Minh City, there are more than 36,000 construction enterprises in the city, with a registered capital of more than 855,000 billion VND and about more than 11,000 real estate businesses, with a capital amount registered of more than 1,211 trillion VND.

Ho Chi Minh City Skyline (Distrct 1)

Regarding the supply of housing projects and products in the first 6 months of 2022, real estate business grew negatively, down 5.82% over the same period in 2021.

In the first 6 months of 2022, the Department of Construction has confirmed the eligibility to mobilize capital for future products of 17 projects with a total of 9,456 houses with a total floor area of ​​860,205m2, including apartments.

In terms of segments, the high-end segment has 7,577 units, accounting for 80.13%; mid-end segment: 1,879 units, accounting for 19.87%; affordable segment: 0 units, accounting for 0%.

Comparing the results of the first 6 months of 2022 with the first 6 months of 2021 shows that the number of projects raising capital increased by 8.3%; total number of houses (apartments) increased by 46.58%; total value to mobilize capital increased by 434.26%; high-end apartment segment increased by 111.29%; mid-end apartment segment decreased by 34.41%; affordable apartment segment is equal to 0%.

According to the Ho Chi Minh City Real Estate Association (HoREA), this is a sign of supply-demand mismatch and also the most obvious sign of unsustainable real estate market development. In order for the real estate market to continue to develop sustainably and in balance, the segment of affordable and affordable apartments of the majority of customers needs to be kept at the highest rate; followed by the mid-end apartment segment; while the high-end segment accounted for the smallest proportion.

Regarding project transfer, from the beginning of 2021 until now, Ho Chi Minh City has only 1 project considered eligible for transfer.

The Department of Construction commented that the project transfer is one of the measures to solve difficulties for each project, contribute to project recovery, continue to start construction again for projects that have stopped construction, completing works, bringing products to market, clearing inventory. However, the transfer of housing projects in recent years has decreased sharply due to incomplete legal procedures and also due to a shortage of land fund, leading to a shortage of new projects, especially projects in the affordable housing segment.

HoREA said that in the first 6 months of 2022, the real estate business in Ho Chi Minh City was the only industry with negative growth, down 5.82% compared to the same period in 2021. From the end of the second quarter of 2022, the The real estate market has shown signs of “deceleration”, slowing down, quiet, especially in the secondary real estate market.

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