Apartment prices in the area formerly known as Binh Duong Province, now incorporated into Ho Chi Minh City, have risen sharply, with many new projects launching at prices above VND 60 million (USD 2,290) per square metre, making prospective owner-occupiers increasingly cautious.
Flat prices in the former Binh Duong area have set a new benchmark (Photo: Trinh Nguyen).
A survey by Dantri/Dtinews found that several residential developments have established a new pricing benchmark. While apartments previously sold for around VND 40-50 million (USD 1,530-1,910) per square metre, with VND 55 million (USD 2,100) once considered expensive, most newly launched projects are now priced above VND 60 million (USD 2,290) per square metre. Some developments positioned in the premium segment are asking as much as VND 70 million (USD 2,670) per square metre.
The trend was also highlighted in CBRE Vietnam's second-quarter market report. Duong Thuy Dung, managing director of CBRE Vietnam, said apartment prices in the former Binh Duong Province had shifted markedly, with most new projects entering the market above the VND 60 million (USD 2,290) per square metre threshold.
Dung added that the area accounted for nearly 80 per cent of all newly launched apartments in Ho Chi Minh City during the quarter.
Project sizes have also expanded significantly. Whereas developments in the area previously averaged around 500 to 600 units, many new schemes now comprise 800 to 1,000 units, indicating both a geographical shift in housing supply and larger-scale developments.
CBRE expects prices in the area to continue rising, lifting the broader apartment price benchmark across the expanded Ho Chi Minh City market.
A report by the One Mount Group Market Research & Customer Insight Centre reached a similar conclusion.
According to the report, around 11,000 new apartments were launched in Ho Chi Minh City during the second quarter, an increase of 51 per cent from a year earlier. More than 7,000 units, or 66 per cent of total new supply, were located in the former Binh Duong Province.
The report said developers are increasingly offering higher construction standards and improved finishing quality, while the market is attracting a growing number of foreign property developers.
Primary apartment prices continued to vary significantly by location during the quarter. In central Ho Chi Minh City, average primary prices remained broadly stable at around VND 103 million (USD 3,940) per square metre.
By contrast, prices in the former Binh Duong Province averaged VND 60 million (USD 2,290) per square metre, up 5 per cent from the previous quarter and 33 per cent year on year, reflecting developers' expectations for the area's growth following its incorporation into Ho Chi Minh City.
One Mount Group forecasts that apartment prices in central districts will increase by around 3 to 5 per cent this year, while prices in the former Binh Duong Province are expected to rise more rapidly, by around 15 to 20 per cent year on year, supported by foreign investment and increasingly high-end residential projects.
Despite the strong price growth, analysts say buyers are becoming more cautious.
CBRE Vietnam said higher apartment prices have made prospective buyers more selective, particularly those purchasing homes for owner occupation. The establishment of a higher price benchmark in the former Binh Duong Province has also pushed up overall housing prices across the expanded Ho Chi Minh City market.
Market sentiment has also been affected by elevated interest rates during the first half of the year. Analysts said higher borrowing costs have made mortgage-dependent buyers more cautious, while even cash buyers have become more restrained because higher interest rates have affected income expectations and long-term financial planning.