HCMC house prices have risen to their highest level in 10 years

This marked a 17% increase from the first three months, real estate agency Cushman & Wakefield (C&W) said in a note.

A report by real estate firm DKRA Group said the most expensive unit is priced at VND750 billion, up from VND700 billion seen in the 2022 peak.

The real estate consultancy Savills Vietnam noted that the prices of the primary market have tripled in the last five years.

Home prices are rising because of a lack of supply, analysts said. Cushman & Wakefield said just 337 new homes went on sale in the second quarter, down 61 percent from a year ago.

This is due to the delay of many projects and real estate developers opting for high-rise apartment blocks instead of low-rise houses.

Trang Bui, CEO of C&W Vietnam, explained that with land becoming increasingly scarce and expensive, developers are prioritizing high-rise housing projects as they are more profitable. High home prices led to a 59% year-on-year drop in sales in the first half, with just 173 units sold, according to C&W.

Giang Huynh, head of research at Savills Vietnam, said the absorption rate for villas priced above VND30 billion was only 6% in the second quarter. Even homes, the best performing segment, only recorded an absorption rate of 31%.

Market researchers expect the supply of houses, shops and villas in HCMC to remain limited over the next three years, with most upcoming projects located five to 25 kilometers from the city center as developers look for cheaper land in places such as Binh Chanh and Nha Be. districts and Thu Duc city and even neighboring provinces.