Vietnam to see more prime apartments at record-high prices this year

For one, Masterise Group’s Grand Marina project is expected to sell at an all-time high of USD 16,000 per sqm.

Prime residential demand in Ho Chi Minh City for in 1Q21 remained healthy although the number of units taken remained low as a result of supply constraints. According to JLL, the 1Q21 high-end apartment sales volume totalled 637 units, coming from three projects, Sunshine Diamond Reiver, Antonia and Cove Residences. The new supply recorded a high take-up rate thanks to robust soft-launch activities amid strong market sentiment.

In the villa/townhouse sector, JLL reports 1Q21 sales volume totalled 311 units, relatively stable q-o-q and y-o-y. Good demand was recorded at Amelie Villa in Nha Be District, which was sold out within only three quarters of launching. Demand remained strong from both owner-occupiers and investors.

Here’s more from JLL:

New 1Q21 launches of high-end apartments reached 466 units, remaining stable y-o-y, and was highlighted by the introduction of a luxury project – Cove Residences with 136 units. New launches of villas/townhouses totalled 292 units, mainly from Amelie Villa project developed by Phu My Hung with 149 units, while other newly launched projects had fewer than 70 units each.

Limited new supply was mainly attributable to the deferred procedure in granting developers the necessary legal documents to develop new projects in both sectors. This was the main market theme throughout 2020 but the situation is expected to improve in 2021 with the introduction of new Vietnamese leadership.

Constraints in supply gives boost to selling prices

Net rents of buy-to-let high-end apartments in 1Q21 averaged USD 8.39 per sqm per month, dropping by 1.8% q-o-q and 19.5% y-o-y. The third COVID-19 outbreak hit some areas, which created a negative impact on the leasing market.

In 1Q21, average completed prices and primary prices in the high-end apartments sector rose by 2.5% and 3.8% q-o-q, respectively, in the high-end apartments sector, supported by healthy demand and limited new supply. In villas/townhouses sector, capital values witnessed a robust growth q-o-q, at 4.4% due to limited supply on the market.

Outlook: New legal guidelines to drive market recovery

Detailed guidelines for Land Law announced in 1Q21 helped to resolve legal issues, and is likely to boost the total high-end apartment supply in 2021 by 8,000 to 10,000 units. Meanwhile, the improving infrastructure and limited land bank situation in HCMC are expected to draw both supply and demand in the villas/townhouses sector toward satellite provinces rather than being limited in the city.

Across the market, prices will keep rising in 2021 and the market will continue to see many projects with record-high prices, backed by constrained supply and healthy demand. Notably, Masterise Group is expected to launch its Grand Marina project at USD 16,000 per sqm, an all-time high for the high-end apartment market.

Note: Ho Chi Minh City Residential refers to Ho Chi Minh City's prime residential market.