Over 2,000 Apartments in Ho Chi Minh City Absorbed in Q3 2024
In the third quarter of 2024, Ho Chi Minh City witnessed a significant absorption of over 2,000 unsold apartments from previous projects, nearly doubling the figures from the prior quarter. This positive development highlights a rising trend in the real estate market, despite ongoing challenges in supply and legal issues.
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Increased Absorption of Existing Inventory
According to CBRE’s Q3 market report, most apartment projects with unsold inventory (previously launched but not fully sold) have shown promising absorption rates. Specifically, more than 2,000 apartments were successfully transacted during the quarter, marking a nearly 100% increase compared to the previous quarter. In total, the market absorbed around 3,700 units of unsold inventory over the past nine months.
To drive sales, developers have implemented a variety of enticing policies such as payment method discounts, flexible payment schedules, loan support, and rental guarantees. Additionally, some high-priced projects in the pre-booking phase have prompted buyers to consider nearby projects with available primary stock, offering similar quality at more affordable prices with faster handover times.
The Return of Stalled Projects
In addition to improved absorption rates, the real estate market has also seen the revival of stalled projects. Toward the end of Q3, several projects that had previously faced legal obstacles, including Gem Riverside (Thu Duc City) and The Forest Gem (Binh Thuan), are now preparing to restart. Other projects that resumed during the quarter, such as D-Homme (District 6), D-Aqua (District 8), and Lavida Plus (District 7), have adjusted their primary sale prices by 10-30% compared to previous phases.
CBRE’s report highlights that while these are encouraging signs of progress in resolving legal issues for real estate projects in Ho Chi Minh City, the number of new project approvals has sharply declined since 2019. In Q3, the city’s new apartment supply hit a record low, with only 127 newly launched units. This figure was even lower than the supply of townhouses and villas, which saw 132 units brought to market. Most of the new supply came from subsequent phases of previously launched projects in areas far from the city center.
Developer Caution and Market Outlook
Vo Huynh Tuan Kiet, Director of Residential Project Marketing at CBRE, noted that many developers are using Q3 to evaluate the market and consider their sales strategies carefully. Ho Chi Minh City is currently facing a mismatch between supply and demand, which has kept prices high and caused hesitation among buyers with real housing needs. On the other hand, developers are eager to achieve higher absorption rates but may hold off on new launches until Q4 or early 2025 to maximize profits.
In the final quarter of 2024, CBRE predicts that around 3,000 new apartments will be launched, bringing the total for the year to about 5,000 units. This is a significant drop in supply compared to previous years, as many large-scale projects have postponed their sales launches to 2025. However, projects that have overcome legal hurdles are expected to officially launch next year, potentially resulting in nearly 10,000 new apartments entering the market—nearly double the supply expected in 2024.
Price Trends and Market Expectations
Regarding pricing, Pham Ngoc Thien Thanh, Deputy Director of Research and Consulting at CBRE, noted that prices are unlikely to decrease. Surveys indicate that even older projects preparing to relaunch are targeting price increases of up to 30% compared to 2-5 years ago. Developers have invested significant time and resources to restart these projects, and in many cases, the projects have undergone substantial changes, prompting them to establish higher price levels.
Despite ongoing challenges such as limited new supply and high prices, the real estate market in Ho Chi Minh City is showing signs of recovery with increased absorption of unsold units and the revival of key projects. However, potential buyers should remain cautious, as prices are expected to rise, and legal issues surrounding project approvals continue to affect supply. As 2025 approaches, the market is poised for a potential surge in new launches, offering more opportunities for buyers and investors.
