INTRODUCTION

Ho Chi Minh City (HCMC) is the country’s economic hub. The city’s population stood at 8.3 million in 2015 and had reached 9.1 million by 2021, just short of the 10 million residents required to be a ‘megacity’. Approximately 80% are urban residents due to the influx of migrant workers. Net-migration reached 21.8‰ in 2021. Strong economic growth of 6% per annum over the last decade has driven housing demand. Over the last two decades, the country has implemented liberal market mechanisms and has actively encouraged private and Foreign Direct Investment (FDI). 

FDI has been a central driver of exportoriented industrialization, particularly for manufacturing and processing industries in HCMC and key southern cities, with 40% of FDI invested since 1988 in fields requiring significant numbers of manufacturing workers. Thus, labour and residential markets have attracted migrant workers around industrial zones in HCMC and surrounding cities.

PRIMARY PRICES THRIVE

Residential markets are recovering post pandemic. In September 2022, apartment stock reached 18,930 units, an increase of 193% YoY. There were approximately 13,290 sales, improving by 345% YoY, and absorption of 70% representing an increase of 10 ppts YoY. This performance was still modest compared to the supply and sales peaks between 2016 and 2019. 

Before 2020, Grade C units contributed up to 80% of sales; however, since 2021, Grade A & B units have overtaken and are now approximately 70% of sales. Constrained stock levels and improving wealth have promoted higher grade development. Grade A prices have risen by 27% pa since 2015, outpacing the 7% to 12% per annum of the lower grades. By Q3/2022, Grade A primary prices in HCMC reached US$14,200 per sq m, the strongest growth across APAC cities at 40% YoY thanks to new branded units in the CBD.