Greater HCMC Ready-built Landed Property 3Q21
Deep decline in supply due to strict lockdown in the South
The new launch of the Greater HCMC area reached 274 units in 3Q21, coming only from small-scale projects in Binh Duong and Long An, with each province providing about 120–150 units. HCMC, being the centre of the pandemic, recorded no new launches this quarter. The strict lockdown in the South heavily affected the launching plans and construction progress of many projects, leading to no new project launch in Dong Nai and BR-VT.
Demand from owner-occupiers still healthy
The total take-up of Greater HCMC reached only 224 units, significantly decreasing at 87.4% q-o-q, in line with reduced supply. HCMC recorded only 47 units sold, falling 74.3% q-o-q. Binh Duong and Long An continued to record low sales at under 100 units for each province. Meanwhile, Dong Nai and BR-VT recorded no transactions. The strict lockdown has hindered face-to-face transactions and project visits, leading to a significant reduction in transactions, mainly from investor-buyers. Demand from owner-occupiers was still healthy as buyers are mostly local residents in their own provinces, rather than from HCMC as previously.
Primary prices continued increasing
In 3Q21, the RBL average primary price in Greater HCMC was recorded at USD 2,913 per sqm land, an increase of 15.7% y-o-y and 2.2% q-o-q. However, for well-developed large-scale integrated projects in Dong Nai, the typical growth rate is up to 4-7% q-o-q.
Online tools were still being used by developers and sales agencies to maintain marketing and communication with customers during the pandemic. Attractive sales programmes were also implemented, such as a zero-interest support package until project handover or a buy-back programme with guaranteed profit.
Looking for more insights? Never miss an update.
The latest news, insights and opportunities from global commercial real estate markets straight to your inbox.
Outlook: Challenges for short-term supply, prices keep increasing
Unresolved legal issues with RBL projects in HCMC, along with travel restrictions between provinces, will lead to delays in construction and sales, challenging new supply in the short term. Therefore, we continue to reduce future supply compared to the forecast in the previous quarter. The estimated new supply in 4Q21 might range from 600-900 units in HCMC and about 1,000-1,200 units in satellite provinces.
Integrated projects in satellite areas of HCMC, either in the form of a dynamic integrated urban area or a weekend getaway, will lead the supply and the market sentiment into that area in the middle and long term. In the context of stable market sentiment after the epidemic, the primary selling price is forecasted to continue to grow strongly.
- Greater HCMC area consists of HCMC, Binh Duong, Dong Nai, Ba Ria – Vung Tau and Long An markets.
- Prices exclude VAT and sinking fund/maintenance fee. Price per sqm land = total unit value / size of the land plot on which the property is built.
- Official launch: Projects are considered as officially launched when the Sale Purchase Agreements are signed, typically upon infrastructure completion.
Source: JLL Research