Ho Chi Minh City Real Estate Market 2024: Luxury Apartment Prices Soar, Affordable Housing Supply Struggles

In 2024, Ho Chi Minh City's real estate market reached an unprecedented milestone as apartment prices soared, surprising many. According to a report from Savills Vietnam, the average price of apartments in Ho Chi Minh City in Q4 2024 reached VND 91 million per square meter, marking a 36% increase compared to the previous quarter and a 33% rise compared to the same period in 2023. This figure set a new record, reflecting the rapid growth of the luxury apartment segment. According to Avison Young Vietnam's report, 90% of newly launched apartments in the last three months of 2024 in Ho Chi Minh City had prices ranging from USD 3,000 to USD 5,000 per square meter (equivalent to VND 75 million to VND 120 million), indicating a clear trend toward the high-end segment.

This aligns with the overall landscape of Ho Chi Minh City's real estate market, where the supply of affordable housing (priced below VND 50 million per square meter) is extremely limited. According to Savills' data, only about 1,300 apartments priced under VND 65 million per square meter were offered in Q4 2024, marking the lowest figure in the past decade. This has resulted in the luxury apartment segment (priced above VND 80 million per square meter) dominating the market and driving the price increase in Ho Chi Minh City's real estate sector in the past year.

Savills' report indicates that in 2024, a total of 12,000 newly launched apartments were sold in Ho Chi Minh City, with more than 80% priced above VND 75 million per square meter. There is almost no new supply in the mid-range and affordable housing segments, forcing homebuyers seeking reasonably priced options to face severe scarcity, further boosting demand for luxury apartments.

One key reason developers continue to prioritize high-end projects is the sustained strong demand for these properties. According to One Housing, in Q4 2024, more than 76% of apartments sold in Ho Chi Minh City had prices above VND 80 million per square meter, demonstrating that demand for luxury apartments remains robust, especially among buyers with strong purchasing power. In fact, despite the sharp rise in apartment prices, the market's absorption capacity for luxury properties remains strong, encouraging developers to continue raising prices for new projects and planning further development of high-end products.

Looking ahead to 2025, the real estate market in Ho Chi Minh City is expected to maintain its upward price trend, with around 10,000 new apartments projected to be launched. However, as in 2024, more than 80% of these new apartments will be priced above VND 75 million per square meter, while affordable housing (below VND 65 million per square meter) will continue to be scarce, with only around 2,000 units, accounting for 20% of the total supply.

With apartment prices continuing to climb, Ho Chi Minh City’s real estate market faces the challenge of balancing the demand for housing among residents with the supply capabilities of developers. While there remains strong demand for affordable housing, the supply is insufficient to meet it, creating a large gap in the market for this segment, making it increasingly difficult for middle- and low-income homebuyers to access the real estate market in Ho Chi Minh City.

Meanwhile, developers continue to focus on high-end projects due to their higher profitability and strong market absorption. Some industry experts suggest that as long as demand for luxury apartments remains high, developers will not abandon this segment. Furthermore, financial and profit considerations remain the main drivers for developers to prioritize high-end housing projects.

The ongoing shortage of affordable housing supply will remain a major issue for both government authorities and homebuyers. Although the government and related agencies have implemented several policies to support the development of affordable housing, the market has yet to show significant improvement. Therefore, adjusting real estate development policies, particularly for social housing and affordable housing projects, will be one of the critical tasks to address the imbalance between supply and demand in Ho Chi Minh City's market.

Overall, the 2024 real estate market in Ho Chi Minh City not only reflects a breakthrough in the luxury housing sector but also clearly demonstrates the sharp price increase amid limited supply. The lack of affordable housing projects will continue to be a significant issue in the market, requiring regulatory authorities to intervene more effectively to promote sustainable development in the future real estate market.