The Real Estate Market in Tây Tp.HCM: A Housing Shortage at Affordable Prices

The Tây Tp.HCM area, including Bình Tân, District 8, District 6, Tân Bình, Tân Phú, and parts of Bình Chánh and Hóc Môn districts, is characterized by its large area, high population density, and strong economic development with numerous industrial and manufacturing zones. However, the real estate market in this area is experiencing mixed trends: high demand for housing but limited supply at reasonable prices.

The High Demand for Affordable Housing in Tây Tp.HCM

The demand for real estate in this area primarily comes from the purchasing power of the residents. Many of them are small business owners who have accumulated significant savings. In recent years, mid-priced properties ranging from 2-4 billion đồng have had good liquidity. However, the current scarcity of new supply has led to high demand for housing, causing developers to continuously adjust their prices.

In the period from 2018 to 2020, there were still many residential projects in Tây Tp.HCM with prices ranging from 30-40 million đồng/m2. However, in the past three years, the prices of apartments in the western districts of Tp.HCM have increased rapidly in line with the general upward trend in the city’s real estate market. Currently, apartments priced below 45 million đồng/m2 have become scarce in this area.

Recently, some apartment projects in Bình Tân and Hóc Môn districts with prices ranging from 45-50 million đồng/m2 have had good purchasing power. Below this price range, there are very few projects available, except for secondary products from previously launched developments.

For example, the Akari City project by Nam Long in Bình Tân district, with prices starting from 45 million đồng/m2, has received positive attention from buyers. Besides being one of the remaining sources of affordable housing in the area, the attractive sales policies offered by the developer are also stimulating demand. The company has recently introduced a favorable sales policy: customers only need to pay 40% of the total price in five installments until receiving the property (December 2024). The bank will disburse the corresponding amount from the third installment. Therefore, customers only need to have 30% of the total price and the bank will support them with a loan of up to 70% of the property value, with no principal repayment for 2 years and only a fixed interest rate of 1% per year until the end of August 2026. For example, if a customer purchases an 80.7m2 two-bedroom, two-bathroom apartment, the only payment after receiving the property will be the fixed interest rate of 1% per year, equivalent to 2.5 million đồng/month until the end of August 2026.

Looking at the current situation, it is expected that the supply of apartments priced from 3-4 billion đồng/unit in Tây Tp.HCM, which used to be considered an affordable area in Ho Chi Minh City, will continue to shrink.

“The prices of houses will continue to rise, especially in the central areas. Therefore, buyers will tend to look for properties in the outskirts, where the infrastructure is increasingly improved and suitable for their financial capabilities. Recently, apartment projects with prices below 50 million đồng/m2 in the Tây Tp.HCM area have had a positive absorption rate. However, it is certain that price fluctuations will continue to occur in the apartment segment in the near future,” shared David Jackson, CEO of Avison Young.

The Attractiveness of Tây Tp.HCM: Infrastructure, Connectivity, and Demand Stability

The demand for housing in Tây Tp.HCM remains stable. Several factors contribute to the thriving real estate market in this area. In addition to its high population density, high mobility, and the large housing demand of the residents, this area is also a hub for well-connected transportation infrastructure.

In recent years, real estate projects in the Bình Tân district, especially those along Võ Văn Kiệt Street (which connects the eastern part of Ho Chi Minh City to the central districts and Tây TP), have attracted a large number of buyers from both the city center and the eastern areas. This is understandable when considering the limited availability and high prices of properties in the city center, making the relatively affordable housing in Tây Tp.HCM an attractive option.

Recently, the Ho Chi Minh City Department of Transport proposed extending Võ Văn Kiệt Street (in Tây Tp.HCM) to Long An province. This news has garnered attention as many people expect the real estate markets in these areas to greatly benefit from the planned transportation infrastructure. This road, when completed, will help solve congestion issues in the Tây Tp.HCM area and further facilitate travel from the western region to the city center via Võ Văn Kiệt Street.

Additionally, numerous existing and planned infrastructure and amenities in Tây Tp.HCM, such as National Highway 1A, National Highway 50, Nguyễn Văn Linh Avenue, the Ho Chi Minh City – Trung Lương – Mỹ Thuận expressway, and the Third Ring Road, are driving forces for the real estate market.

According to Võ Huỳnh Tuấn Kiệt, Director of Residential Services at CBRE Vietnam, regarding the supply in 2023, as much as 80% of new projects will be concentrated in the eastern part of Ho Chi Minh City, with prices ranging from 60-100 million đồng/m2. Meanwhile, the development of new real estate projects in the western region of Tp.HCM is relatively scarce, with most available supply coming from previously launched projects. Despite the significant price increases in recent years, the Tây Tp.HCM area still leans towards providing reasonably priced housing compared to the overall market in Ho Chi Minh City. The price range of 3-4 billion đồng/unit is suitable for young families looking to own a home in an urban area.

However, the increasingly scarce supply of new real estate poses many challenges for the Tây Tp.HCM market. The pressure to raise prices and the mismatch between demand and supply may occur in this area in the near future.