Ho Chi Minh City’s prime apartment sales hit a mere 766 units in Q3

This translates to a selling rate of 30.9%.

In 3Q23, high-end apartment sales in Ho Chi Minh City totalled 766 units, and the selling rate continued to decrease to 30.9%. 

According to JLL, transactions mainly focused on newly launched projects, thanks to the long soft-launch period, while most inventory from the remaining projects witnessed a decline in transaction volume. Developers continued to implement many flexible payment methods and discount policies to attract buyers.

Here’s more from JLL:

Due to constraints of new supply and prolonged buyer cautiousness, the Ready-built Landed (RBL) market recorded a limited number of transactions, with only 32 units sold (down 94.8% y-o-y) and a sales rate of just 8.5% in 3Q23. Stock in the Primary market was mainly inventory that had high transaction values (over USD 1 million/unit), making them less liquid and affecting quarterly sales rates.

No new supply in the RBL market

In 3Q23, the High-end Apartment market welcomed 786 units of new supply from two officially launched projects, down 30.0% q-o-q. Most developers were still cautious about launching new projects due to weak market sentiment and focused on accelerating construction to hand over the supply on schedule instead. 

The RBL market recorded no new supply in 3Q23, primarily because developers tended to delay introducing new projects due to the market downturn. Additionally, there was stagnation in legal procedures as well as the construction progress of projects that had been soft-launched but did not yet qualify for the SPA signing stage.

Selling prices remain stable

Growth in net effective rent for High-end Apartments accelerated for the seventh straight quarter, recording +1.1% q-o-q and +5.7% y-o-y at USD 9.7 per sqm per month. Although renting presented itself as a more feasible option while waiting for economic indicators and prices to further stabilise, the rent growth has started to become more stable compared to previous quarters.

Capital values in the High-end Apartment market registered steady growth in the quarter with a slight increase of 1.2% q-o-q, reaching USD 3,393 per sqm, as the market welcomed new high-quality completions. High-end Residential demand remained stable amid the limited new supply. For the secondary market, transaction prices fluctuated marginally.

Outlook: Weak market sentiment to continue over the next 12 months

Supply is still under pressure due to the unsteady economy, despite starting to receive positive policy changes. Thus, the High-end Apartment market is expected to welcome about 600 units, for a total 2023 supply of 5,500 units, equivalent to the new supply in 2022. The RBL market in 4Q23 is expected to welcome around 100 units from two new projects in Binh Tan and Binh Chanh.

Despite the expected positive policy changes, market sentiment is likely to remain subdued over the next 12 months due to the gloomy economic context, and some time is required for new policies to have a full impact on the market. Future completion of higher-priced projects should raise capital value growth in both residential segments in 2023, backed by limited new supply.

Note: Ho Chi Minh City Residential refers to Ho Chi Minh City's high-end apartment market.