Rising Prices and Imbalanced Supply in HCMC’s Housing Market
HCMC has witnessed a notable shift in its housing market over the past year, with no apartment projects priced below VND40 million (US$1,500) per square meter launched in the first half of 2025. This trend marks the second consecutive year where affordable housing options have been absent from the city’s real estate landscape.
According to data from the Ho Chi Minh City Real Estate Association (HoREA), four new projects were introduced during this period, offering a total of 3,353 apartments. All of these projects were classified as high-priced, reflecting a 15% decline compared to the same period in the previous year. The mid-range and affordable segments, which are defined as housing priced at VND40 million or less per square meter, remain underrepresented.
The primary market has also experienced an upward trend in prices. New launches saw an increase of 4-6%, while older projects that introduced new units during the quarter reported a 2-4% rise. In the second quarter alone, new apartment developments featured units costing VND55 million or more per square meter. This supply imbalance is not limited to HCMC but is observed nationwide.
A report by property consultancy Avison Young Vietnam highlighted that 36,000 new apartments were launched across the country in the first half of 2025—double the number from the previous year. More than 62% of these units were priced above VND80 million per square meter, further emphasizing the dominance of luxury housing in the market.
Luxury Segment Gains Momentum
The luxury apartment segment has seen a significant surge, with only 30% of units falling into the mid-priced category—approximately 9,000 units. These mid-range properties are primarily located outside of HCMC and Hanoi. In HCMC itself, the average price per square meter stands at VND77 million.
Pham Thi Mien, deputy director of the Vietnam Real Estate Research Institute, noted that the supply of housing remains skewed toward the luxury and high-end segments. Affordable housing options are mainly available through social housing projects, which added around 3,000 units in the first half of the year.
Le Hoang Chau, chairman of HoREA, emphasized that the luxury segment will continue to dominate HCMC’s housing market in 2025. He warned that the absence of mid-range and affordable housing is distorting the market structure. “The limited supply of commercial housing has driven prices upward,” he said.
Factors Contributing to Price Increases
Over the past few years, HCMC apartment prices have occasionally seen annual increases of 15-20%. According to Mien, the affordable segment is less appealing to developers due to its relatively low profit margins of only 15%. Additionally, there is strong demand for luxury housing, which encourages developers to focus on high-end projects.
Scarce urban land, rising costs of land, construction, and labor are further pushing developers toward high-profit projects. Mien pointed out that there are no strong factors that could drive down housing prices in the short term. Instead, several factors are expected to push prices upward, including the new land price framework.
Most of the supply in 2025 is expected to be concentrated in the luxury and high-end segments, potentially leading to annual price increases of 8-10%.
Investor Confidence and Market Outlook
Chau concurred with this prediction, citing the new land price framework and investors’ expectations of profits as key drivers of continued price rises. “Most developers have little financial pressure, reducing their incentive to lower prices,” he said.
Low interest rates, cheap capital, and accelerated public investment are fueling expectations of further price hikes. However, the supply of affordable housing remains scarce, which continues to put upward pressure on prices.
A recent report by the HCMC Department of Construction forecasted a continued but slow market recovery in 2025, with no major breakthroughs expected. It noted that housing prices could rise slightly in some segments due to the new land price framework.
Despite the challenges, the apartment segment remains the most promising due to limited new supply and sustained demand for housing space. The report also indicated that supply is expected to improve gradually in the coming years, though it may not fully address the current imbalance in the market.